Stealing from the workers - A union agenda.
The revelation that the union, the CFMEU, has been and is involved in a massive wage theft scandal trashes assumptions about who protects or exploits workers.
In my post last Friday (9 Feb) I flagged letting you in on what is possibly the largest wage theft scam conducted in Australia. And it involves the construction union, the CFMEU and ‘signed off’ on by the Fair Work Commission.
The revelation of this huge wage theft happened on the evening of 7th February just before the Albanese government’s third tranche of industrial relations legislation passed the Senate on 8th February.
It was quite a week last week on industrial relations law issues. And that’s without including the passing of the weird ‘right to disconnect’ provisions, a Greens political thought bubble seeking to appeal to a demographic the Greens see as their voter base.
Note. The Bill passed in the Senate last week is to be voted on (rubber stamped) in the House this week.
Once passed this completes the Albanese government’s stated industrial relations agenda. Have no doubt Australia is now in a vice-like process of workplace institutional change the likes of never before seen.
And of course it’s all promoted under the banner of ‘worker protection.’
The Revelation
It was a speech in the Senate on 7th February by One Nation Senator Malcolm Roberts that revealed what could prove to be Australia’s largest wage theft scam. Assuming the accuracy of the report, the scam (One Nations description) blows apart the claim of Labor, the unions and the industrial relations system to be the institutions of worker protection. Instead the theft is institutionally driven.
What lays bare the theme of potential systemic exploitation is One Nation’s assertion that the alleged wage theft is occurring under enterprise agreements approved by the Fair Work Commission. Even more startling is the claim that the Construction, Forestry, Mining and Energy Union (CFMEU) (arguably Australia’s most powerful and militant union), is a party to the wage theft agreements.
These two institutions—the Fair Work Commission and the unions (in this case the CFMEU)—are supposed to be at the core of Australia’s worker protection system.
One Nation’s 10,000-word report provides the full calculations of how the scam has been constructed.
The core facts.
According to Senator Roberts, many thousands of hard-working coal miners have been conned into having tens of thousands of dollars a year ‘stolen’ from them. It’s been happening for a decade or more.
He refers to the ‘culprits’ as labour hire companies supplying casual workers to coal mines in Central Queensland and the Hunter Valley in New South Wales. The CFMEU and the Fair Work Commission have approved the arrangements.
Independent analysis commissioned by One Nation has found that casually employed coal miners are being short changed an average of $32,745 dollars a year (in 2023 prices).
The ‘scam’, says Senator Roberts, has a simple design made possible by a quirk in the Black Coal Industry Award.
Under the award it is illegal for mine employers to have casual employees. If casual employees were legal under the award, mine employers would have to pay casuals 25 per cent more than the award full-time rate.
But because the award prohibits casual coal miners, labour hire companies have created enterprise agreements where they employ casuals. The CFMEU has either negotiated, approved or sought to become a party to these agreements. The Fair Work Commission has approved these agreements.
But the enterprise agreements are paying much less than what should be paid under the award if award casuals were allowed. He says this is ‘wage theft’.
Some detail – It’s a ‘casuals’ scam
Senator Roberts goes into the details describing the scam as being constructed through “technical legal trickery”.
He gives the background to how coal miners are required to work anytime, 24 hours a day, seven days a week. They work close to a 44-hour week Saturdays, Sundays, public holidays, days and nights.
Under these 12-hour shifts a full-time mineworker earns about $120,849 per year or $53.84 an hour based on the award minimums. On top of this they have holiday and other ‘entitlements.’
Casual workers should be paid a 25 per cent loading on top of this minimum full-time employee’s rate to compensate for not having holidays and entitlements. That is, casual coal mine workers doing the same hours should earn $151,061 a year, or a flat rate of $66.40 an hour.
The One Nation-commissioned analysis looks in detail at the hourly rates of mineworkers under five of the most common labour hire Enterprise Agreements in coal mining. None of the Enterprise Agreements was paying casual workers anywhere near the $66.40 an hour that they should be receiving. Senator Roberts quoted the pay rates of those agreements.
Specific enterprise agreement facts
The CoreStaff Enterprise Agreement 2018 pays a casual mineworker $56.16 an hour. The yearly shortfall for coal mine workers working under that labour hire agreement is $22,623.
The FES labour hire Agreement 2018 pays casual workers $54 an hour, a fact revealed in a Senate hearing. That’s a $27,563 a year wage theft.
The highest casual pay rate under the WorkPac labour hire Agreement 2019 is $51.38. This is a $33,555 a year underpayment.
The Chandler Macleod labour hire Agreement 2020 pays a casual mineworker $48.85 an hour, far below $66.40. This amounts to a $39,341 yearly underpayment.
The TESA Group labour hire Agreement 2022 pays a casual mineworker $48.28 an hour, again well below $66.40. That’s $40,645 a year ‘stolen’ from the mine workers.
Across these five agreements a casual mineworker is losing more than $32,000 on average every year compared to what they should be paid with the standard casual loading on the award rate.
The One Nation report provides copies of the enterprise agreements from which the foregoing figures have been quoted. These are 2023 pay rates.
A proof challenge
In his Senate speech, Senator Roberts challenges each of the parties in the ‘scam’. To the labour hire companies, the CFMEU and the Fair Work Commission, One Nation says, prove that its report is wrong. He says “don’t give us the excuse of the legal construct that you have created that enables the wage theft. Prove to us that the payments to the coal workers are higher than what would be paid if the award allowed for casual workers. We believe that you will fail”, he concludes.
There are potentially tens of thousands of victim mineworkers and a history of dodgy agreements that reach back over a decade. The total wage theft must be massive if fully investigated.
The failure of the Fair Work Commission and the Fair Work Ombudsman is shocking institutional failure.
It is failure that calls into question the entire structure, promise and integrity of the system in Australia that is supposed to protect Australians from underpayment.
CFMEU is a corporate business
The failure of the CFMEU is even more obvious.
Senator Roberts says, “We even have a signed letter between the Hunter Valley CFMEU and Labour Hire company Chandler Macleod. In that letter, the CMFEU promises to never take action against Chandler Macleod for any breaches of worker entitlements”.
Why would the CFMEU endorse underpayment of coal workers? It seems illogical and against the CFMEU’s interests. Yet the One Nation report details that the CFMEU has had commercial, business dealings in the coal sector for decades. Senator Roberts says, “The CFMEU pretends to be a union. In fact it is one of the bosses.” It’s a serious accusation. But the report cites ASIC and other records of the CFMEU’s commercial operations in the coal mining sector, including shared ownership of, and receiving dividends from, major coal mines.
Senator Roberts says that One Nation took up the cause when, in 2019, One Nation had coal miners come to them complaining of underpayment. Again, Senator Roberts says, “We took action. I have been holding the Fair Work Commission accountable for nearly 5 years.”
“We asked the Fair Work Commission to provide their copy of the Better Off Overall Test (BOOT test) they’ve done on the relevant enterprise agreements. The BOOT or Better Off Overall Test is supposed to be a safety net that rejects illegal agreements and protect workers from underpayment.
But the Commission had no documents to hand over. No spreadsheets, no tables comparing conditions and benefits and no real assurance they had properly weighed it up.
The response was more along the lines of “trust us, it passes”.
Senator Roberts states, “The CFMEU has been signing off on these dodgy agreements for a decade and the Fair Work Commission is either asleep at the wheel or complicit.”
“Last year we brought this issue to the attention of the Fair Work Ombudsman and Minister Burke. Responses from both has been like that of the Fair Work Commission. Trust us, they say! But they provide no hard evidence.
One Nation then commissioned independent research. The result is a One Nation report in two parts.
The first gives the facts of casual work patterns in coal mining. It marries those patterns against what would be required if casual employment were possible under the award.”
Facts verses political spin.
What should not be underestimated is the scale of this report. The facts and analysis supporting One Nation’s conclusion that key players in the industrial relations system are facilitating wage theft is substantial and solid. It will require a significant effort to disprove its facts.
As it stands, the Albanese Labor government has a problem. The CFMEU is a powerful, not-to-be-ignored force inside Labor. This report, assuming it is accurate, cuts to the core of Labor’s political and institutional integrity.
During 2023 Albanese’s Labor government passed sections of its Loophole Bill with critical backing from Senate independents Pocock and Lambie. This included the ‘Same Job Same Pay’ provisions. This One Nation report arguably demonstrates that theme to be a Labor lie.
This report and revelation of the scam has the potential and should blow apart of the ‘worker’ credentials of the Labor movement (ALP and unions). There’s only one thing that will save the Labor movement from such an outcome, and that is if the opposition (Libs/Nats) choose to ignore the report and allow it to die as a sideline event.
There’s more (of course) that I’ll reveal soon. This includes the One Nation Bill to fix the scam and I’ll provide you a copy of the report.