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“Secret Payments Utterly Unacceptable”: Australia to criminalise corrupt payments to union officials

This post was written by Natalie Caton.

In a further step towards increased transparency and strengthening Australia’s anti-corruption laws and regulations, Australian Prime Minister Malcom Turnbull today announced that the Australian government will be taking steps to pass legislation that criminalises payments made to union officials unless the payments have a legitimate purpose.

This post provides a quick snapshot of the proposal, plus 6 questions you should ask yourself to prepare for the new regime.

Heavy penalties at stake

If passed, the bill will carry heavy penalties: 10 years imprisonment or up to A$4.5 million in fines for corporates who make payments with a corrupt intent of encouraging union officials to act improperly, or a lesser two years imprisonment or fines of up to A$450,000 for corporations who make payments that do not have a clearly legitimate purpose.

Where has this come from?

The announcement comes off the back of the Royal Commission into Trade Union Governance and Corruption. The final report of the Royal Commission, delivered in December last year, revealed that the Commission had uncovered a wide range of corrupt conduct across a range of unions including that payments had been made between unions and major companies during enterprise bargaining.

Link to broader anti-corruption framework

The proposed laws align with Australia’s already established anti-corruption legislation.  They send a clear message that there must be transparency in the workplace and are a welcome step towards addressing the concerns raised by the Commission.

Next steps

We will continue to monitor this development as it unfolds.

In the meantime, it’s important to start thinking about how this might impact your business.  For example:

  1. Are you engaged with any trade unions?
  2. Do you make any payments to union officials?
  3. If so, what is the purpose of those payments and how are they documented?
  4. Are your policies and procedures reflective of what you do in practice?
  5. Are employees aware of their obligations?
  6. What will need to change if this proposal proceeds?
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