http://blogs.news.com.au/heraldsun/andrewbolt/index.php/heraldsun/comments/mccle...Julia Gillard’s relationship with a former union official accused of ripping off his union is now back in the news - placed there by Labor MP Robert McClelland in parliament today.
Gillard sacked McClelland for backing Kevin Rudd in February.
In Parliament today, McClelland hit back - by referring obliquely to an explosive scandal in the 1990s involving her then boyfriend Bruce Wilson, an Australian Workers Union state secretary accused of ripping off union money. McClelland said it was a case in which Gillard and he were “representing opposing clients” and “that matter has coloured much of my thinking in this area (of cracking down on malfeasance by union officials).
Even more pointedly, McClelland told Parliament the Government’s proposed toughening of Fair Work Australia’s investigative process did not go far enough, and needed the power to force union officials “to compensate the organisation for loss arising from their misconduct”.
As I mentioned, these issues also arose in those matters that I was involved with in the mid-1990s, which were file in both the then Industrial Court of Australia and the Federal Court of Australia. There are a number of matters, generally under the name of Ludwig and Harrison and others, but probably most relevantly matter no. 1032 of 1996.
Check that last case (relatively inconsequential of itself) and you will find it is one of the many in the AWU factional brawl at the time, with Bruce Wilson named as one of many respondents. McClelland is listed as a solicitor in the matter, but Gillard or her firm are not, suggesting McClelland was referring to the general union fighting that included a battle over how far to persue Wilson for the missing money, and whether to call for a royal commission. As it is, much of that money never was paid back.
Gillard is involved because she helped Wilson set up bank accounts which he used for his schemes, but Gillard insists she acted lawfully, did not know what Wilson was doing with those accounts, and did not profit from them. She was “young and naive”, she has said, being only in her mid 30s and the partner of law firm Slater and Gordon.
More from McClelland in Parliament:
To borrow the words of Prime Minister Gillard, she said on ABC Radio on 9 May of this year:
Let me say I never want to see a dollar that a worker gives a union used for any purpose other than the proper purposes of representing that union member’s best interests.
Indeed, I know the Prime Minister is quite familiar with this area of the law, as lawyers in the mid 1990s were involved in a matter representing opposing clients. Indeed, my involvement in that matter has coloured much of my thinking in this area and resulted in me moving amendments on 17 September 2002 to actually strengthen the powers of the Federal Court of Australia.
In short, this bill has merit and I support it. But, with my new freedom as a backbencher, I would like to suggest where I think the law can be further strengthened. My main focus is on enhancing the ability of members of organisations to seek orders compelling officers of their union to perform and observe the rules of the union and, in so doing, comply with their broader fiduciary and statutory obligations, and ultimately, if required, to compensate the organisation for loss arising from their misconduct...
McClelland has fired a warning shot - a cannon, really - over Gillard’s bows. She should be seriously worried.
McClelland’s full remarks:
Mr McCLELLAND (Barton) (12:09): Before addressing the matters that the honourable member raised, can I say on the record that in no way did I recommend the watering down of the legislation. In fact, I moved amendments on 17 September 2002 that significantly increased the powers of the Federal Court of Australia. I refer the honourable member to page 6,512 of the Hansard of 17 September 2002, which sets out the amendments moved by the opposition, such amendments that were accepted by the government following discussions that I had with the then minister for workplace relations with a view, as the amendments will show, to very firmly strengthening the legislation. I will refer in my contribution, in part, to that.
In my experience, the vast majority of trade unions are professionally managed by highly competent and dedicated people who act on the basis of sound professional advice. But, regrettably, there have been exceptions to that. Officers have sought to obtain personal benefit or benefit on behalf of others at the expense of members of their union. Reported instances include not only misapplying funds and resources of the union but also using the privileges of their office to attract and obtain services and benefits from third parties.
Aside from issues of profiteering, secret commissions and tax avoidance, these undeclared benefits can compromise officials. Rather than diligently representing the interests of their members without fear or favour they effectively ‘run dead’ as a result of these side deals. This is no less than graft and corruption in its most reprehensible form, and it occurs at the expense of vulnerable members whose interests they have been charged with representing.
To borrow the words of Prime Minister Gillard, she said on ABC Radio on 9 May of this year:
Let me say I never want to see a dollar that a worker gives a union used for any purpose other than the proper purposes of representing that union member’s best interests.
Indeed, I know the Prime Minister is quite familiar with this area of the law, as lawyers in the mid 1990s were involved in a matter representing opposing clients. Indeed, my involvement in that matter has coloured much of my thinking in this area and resulted in me moving amendments on 17 September 2002 to actually strengthen the powers of the Federal Court of Australia.
In short, this bill has merit and I support it. But, with my new freedom as a backbencher, I would like to suggest where I think the law can be further strengthened. My main focus is on enhancing the ability of members of organisations to seek orders compelling officers of their union to perform and observe the rules of the union and, in so doing, comply with their broader fiduciary and statutory obligations, and ultimately, if required, to compensate the organisation for loss arising from their misconduct.
I will briefly outline the scheme of the act and, in so doing, will highlight those areas where additional enhancements should be made. The foundation of the scheme is, essentially, the codification of law that has established what those fiduciary obligations are. In particular, part 2 of chapter 10 of the Fair Work (Registered Organisations) Act contains quite detailed provisions regarding the general duties of trade union officials in respect to the financial management of organisations and also in respect to the misuse of position.
Section 285, for instance, sets out the obligation to exercise care and diligence This requires judgment to be made in good faith and for proper purpose. The section specifically provides that decisions cannot be made for the purpose of seeking a material personal interest. Section 286 sets out the obligation to act in good faith and for a proper purpose and specifically to act in the best interests of the organisation. Section 287 sets out the obligation not to obtain personal advantage for oneself or for another person, and section 288 sets out the obligation not to improperly use information for personal benefit or for the benefit of another.
As I mentioned, these principles arise from the common law, including case law concerning trade unions, such as the well known cases of Short v Wellings (1951), Allen v Townsend (1977), Cook v Crawford in the early 1980s, Saddington v Oliver (1983) and indeed the former member Lindsay Tanner v Darroch (1986).
As I mentioned, these issues also arose in those matters that I was involved with in the mid-1990s, which were file in both the then Industrial Court of Australia and the Federal Court of Australia. There are a number of matters, generally under the name of Ludwig and Harrison and others, but probably most relevantly matter no. 1032 of 1996.
It can be seen that the statutory provisions and legal principles impose obligations, not just in respect of financial management and proper administration, but also, more generally, with respect to conduct that seeks to benefit the individual or, as the legislation also emphasises, a third party.
These principles are sound; it is with respect to the issue of remedies that I think more attention needs to be given. Part 2 of chapter 10 sets out the mechanisms for enforcing the obligations of trade union officials, including by obtaining a civil penalty order and, potentially, an order for compensation. The relevant provisions include section 306, which provides for the imposition of a civil penalty order of up to 100 penalty units in the case of a corporation and 20 penalty units in the case of an individual. Section 307 specifies the circumstances in which a compensation order may be made for breach of a civil penalty provision and requires the court to have regard to the extent of any profits made by an individual.
Section 308 gives the Federal Court wide power with respect to any orders that may be ‘appropriate in all the circumstances’, including the power to grant interim injunctions. Section 310 gives standing to commence an action for a civil penalty and compensation order to either the general manager of Fair Work Australia or to the affected organisation itself. Subsection 310(2) specifies that the minister for workplace relations also has standing but only with respect to enforcement of matters arising under section 305(2)(zk) which relate to enforcing orders once made. The first point I wo
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Julia Gillard’s corrupt past (Read 1406 times)
