Union Royal Commission urged to look at funds and insurers
A major industry and employer group has called for the Royal Commission into Trade Union Governance and Corruption to not only look at the unions themselves but the “funds and entities established by unions” - something capable of impacting superannuation and insurance providers.
The call has come from the Australian Industry Group which, at the same time as welcoming the Government’s terms of reference for the Royal Commission, said it should “focus upon funds and entities established by unions purportedly to provide redundancy, income protection and training benefits to members, but which provide very lucrative and inappropriate revenue streams to unions”.
AI Group chief executive Innes Willox said unions used pattern and enterprise bargaining to coerce employers to pay into funds and entities which they had established and “often the income protection insurance products which an employer is forced to pay for are much more costly for the employer and provide fewer benefits to the employees than other products readily available in the market”.
“However, because of the very substantial commissions and other payments made to the unions, the unions typically refuse to accept employer offers to provide equivalent or better benefits to employees through an alternative provider (eg, through an industry superannuation fund or through the insurance company which the company is using for other types of insurance). In such cases, unions are benefiting at the expense of both employers and employees,” he said.
“As union membership revenue has declined, these lucrative and inappropriate revenue streams have become central to union finances. The revenue streams no doubt result in the fines which militant unions regularly incur for unlawful conduct having a significantly reduced impact on their operations,” Willox said.
“These problems were identified by the Cole Royal Commission into the Building and Construction Industry but the recommendations made by the Royal Commission in Volume 10 (Funds) of its final report have inexplicably never been implemented. As a result, the problems have progressively worsened,” he said.
AUTHOR
Mike Taylor
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