Proceedings against the AWU and Mr Melhem

 

9 August 2019

 

The ROC was contacted by a media outlet today in relation to AWU proceedings and was asked to provide a response. This is our response:

In May 2018, the Registered Organisations Commissioner commenced proceedings in the Federal Court against the Australian Workers’ Union (AWU) and its former Victorian Branch Secretary, Mr Cesar Melhem, alleging multiple contraventions of the Fair Work (Registered Organisations) Act 2009 (Cth) (RO Act).

The allegations relate to the AWU's failure to keep an accurate register of members during the period from 2008 to 2013, when Mr Melhem was the Victorian Branch Secretary. 

Allegations against AWU

The Commissioner and the AWU have recently reached a formal agreement under which the AWU now admits contraventions of the RO Act alleged by the Commissioner relating to the addition of some 851 non-members to its Register, and the failure to remove more than 1,000 unfinancial members from its Register.  The Commissioner will seek the imposition of civil penalties on the AWU at a penalty hearing on a date to be fixed.

Allegations against Mr Melhem

The Commissioner alleges that the conduct engaged in by the AWU and Mr Melhem constituted a scheme pursuant to which the membership of the AWU was artificially inflated and the AWU Victorian Branch received payments that were not legitimately due to it.  The Commissioner alleges that this conduct breached Mr Melhem's obligations as an officer under sections 285, 286 and 287 of the RO Act.

A trial relating to Mr Melhem's alleged contraventions is scheduled to commence in the Federal Court on 11 September 2019.

The Registered Organisations Commission will be making no further comment at this time.

 

Background material

As part of its final report, the Trade Union Royal Commission (TURC) made a number of referrals to the General Manager of the Fair Work Commission (FWC) relating to potentially serious contraventions of the RO Act by the AWU and its former Victorian Branch Secretary Mr Cesar Melhem (the AWU referrals).

The AWU referrals were based on a series of case studies involving a scheme of conduct in which large sums of money were paid by employers to the Victorian Branch of the AWU between 2007 and 2013.  The TURC found that in exchange for cash payments, the Victorian Branch of the AWU agreed not to seek better terms and conditions for certain of its members and that the arrangements involved both the false inflation of membership numbers and the falsification of documents.  The TURC found, amongst other things, that the AWU registered workers as members who did not know they had been registered.

The TURC also found that while it would not otherwise have been difficult for the AWU to obtain better terms and conditions for the workers, all involved in the arrangements benefited except the workers that the AWU was supposed to be representing.

On 2 November 2016, the FWC commenced an independent investigation in relation to the AWU referrals.  The entire referral was the subject of an independent investigation by the Registered Organisations Commission upon its establishment on 1 May 2017 which resulted in the commencement of these proceedings.

Media contact: (03) 9603 0767 or media@roc.gov.au