Lessons from the Royal Commission into Trade Unions - The AWU Workplace Reform Association

22nd December 2014

Reading the Interim Report into Trade Union Governance and Corruption’s account of the formation of the AWU Workplace Reform Association and the gross misuse of the funds it accumulated in the early 1990’s, one might be excused for raising an eyebrow at the rather forgiving attitude taken by the Commission to the role of Australia’s previous Prime Minister Julia Gillard. People employed in and around the Victorian Labor Party and unions at the time that were intimately aware of the shenanigans occurring within the Victorian Branch of the amalgamated AWU-FIME, will probably conclude that Ms Gillard owes the good Commissioner a Christmas card as she has certainly dodged a bullet.

Maybe it is the solidarity of the legal fraternity, a willingness to accept the naivety of a young female lawyer (albeit a salaried partner) or just another case of a highly distinguished judge appointed by a conservative government not understanding the political nature of the Australian labour movement. Whatever the explanation some of the conclusions of the Commissioner evaluating the criticisms of Julia Gillard beggars belief. For example, at paragraph 66 of Chapter 3.2 of the Interim Report the Commissioner refers to evidence that Ms Gillard ” …had the reputation, merited or not, of being very left-wing” which was quite true. However, he opines that “People with a left-wing reputation are usually keen to preserve it by avoiding involvement in fraudulent conduct.” That view might come as surprise to the memory of the late Laurie Short and others since that fought to rest control of trade unions from members of the various Marxists organisations that have infiltrated Australian trade unions. There are many other examples of the good Commissioner’s generous views scattered throughout the report that readers might find surprising.

Nevertheless, Ms Gillard’s reputation has not escaped completely unscathed. In relation to allegations of payments from the funds of the AWU Workplace Reform Association bank accounts made to tradesmen working on her personal property, the Commissioner has clearly preferred the evidence of other witnesses over her own. (See paragraphs 178-225) Notably, the Commissioner very gently leaves open the question of truthfulness.

Despite the focus on the role of Julia Gillard in the events of 1994, subsequent commentary in the Interim Report, in particular the discovery of the AWU Workplace Reform Association bank accounts and the dispute between rival factions within the amalgamated AWU-FIME, provides the most sober lesson from this very sordid affair. Evidence of a conversation that Robert Kernohan claimed to have had with Bill Shorten in 1996 about the matter is recounted at paragraph 291 of Chapter 3.2 of the Interim Report. Bill Shorten had recently been appointed to a position of Organiser. The full transcript should be read but in summary, Bob Kernohan had raised an objection to the manner in which Bruce Wilson’s conduct had been swept under the carpet in a political deal to keep the peace. Bob’s objections were allegedly met with the following exchange:

“Bob think of your future. There’s been a payout, we are all just moving on”. I said to Shorten, “what, sweep it under the carpet like everyone else seems to have?” Shorten put his hand on my shoulder and responded, “Bob think of your future.” He said, “If you pursue this, a lot of good people will get hurt and you will be on your own.”

Bob chose not to ignore it and suffered as a result. The Commissioner noted that Bob Kernohan’s whole subsequent career has been adversely affected by a series of incidents of which this is one. Although Bill Shorten has denied any recollection of the conversation, Commissioner Heydon concluded that on the probabilities it is likely that the incident took place as Bob Kernohan recalled. I knew Bob Kernohan and Bill Shorten during that period and I believe both men to be honourable people. If Bob had been offered the opportunity to succeed Bruce Wilson as Victorian State Secretary, I am sure he would have been a fine leader of the AWU. I also have no reason to disbelieve Bob’s version of the conversation.

The lesson learn’t is that trade unions are not be above the law. Criminal conduct should always be exposed and honest people encouraged, not marginalised, for challenging the inconvenient truth of corruption. If the trade union and labour movement is not prepared to face this fundamental test, then it should not be surprised that eventually the State will intervene to clean up their mess. In the words of Commissioner Heydon at paragraph 294 of this section of the Interim Report:

“It is a sad illustration of the difficulties facing those who want to complain about the status quo in the world of trade union officials, even polite and well-intentioned ones.”

I encourage you to read the Royal Commission Interim Report.