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With plotters using the labour movement as a means to amass power, unions have become vulnerable to rorting and the erosion of workers’ rights. By Mike Seccombe.

Unions poisoned by ALP affiliation

At first blush, former union leaders Kathy Jackson and Joe de Bruyn would seem to have little in common.

At a personal level, she and he embody antonyms: respectively mercurial and stolid, charismatic and nondescript, material and spiritual.

But in one way they are alike. Each was part of a cabal of people who played the politics of the labour movement to entrench themselves in power, while pursuing agendas that had little to do with the interests of the members of their respective unions.

Their ends were very different but the means were not so dissimilar. Now their pasts have caught up and they are paying in their respective ways. And in their stories a lot of people see some big lessons for the union movement and the Australian Labor Party.

Kathy Jackson and the HSU

We’ll come back to de Bruyn, the Catholic arch-conservative under whose 36-year leadership the huge Shop, Distributive and Allied Employees’ Association, known colloquially as the SDA or the shoppies, was a bulwark against progressive social policy in the Labor Party.

But let’s start with Jackson instead, former national secretary of the Health Services Union, and the big difference between her and de Bruyn: one is an apparent criminal and the other is not.

Jackson was in court again this week, this time the Melbourne Magistrates’ Court, where she faced 70 charges of theft and deception. The brief of evidence ran to 5000 pages. Media reports revelled in the details of her alleged misuse of union funds.

The charge sheet, as one report put it, “read like a travelogue” – international extravagance, including holiday stays at the Paramount in New York, the Bellagio in Las Vegas and Excelsior in Hong Kong. There were evocative lesser details, too: the $1000 treadmill, the $1800 spent on posters and the $570 on flowers. In all, hundreds of thousands of dollars in allegedly unauthorised spending.

The matter was adjourned to January 24 and Jackson was ordered in the meantime to keep a “static residential address” and surrender her passport.

The former globetrotter was well and truly grounded before that, however, having declared bankruptcy last June. As a result of previous civil proceedings in the Federal Court, she was ordered to pay back $1.4 million to the HSU. Interest and court costs incurred in fighting that case added about another $1 million.

The Kathy Jackson story has been a media circus throughout, and Jackson seems to have courted the publicity, whether it be her bizarre appearance on Four Corners, or her declaration outside the trade unions royal commission that while she had once had sex with one of the barristers who questioned her, they were not really lovers. “Everybody makes mistakes and has a charity shag along the way,” she said.

Still, the arc of her story is classic tragedy.

In 2012 then opposition leader Tony Abbott lauded her as a “heroic” whistleblower after she alleged Craig Thomson, her predecessor in the HSU before he became a Labor MP, had misused union funds.

Thomson’s political career was ruined and the Gillard government badly damaged by the association. Then Michael Williamson, a former HSU and Labor Party national president, was caught up in it, and subsequently sentenced to seven-and-a-half years’ jail for what the sentencing judge called his “parasitic plundering” of some $1 million of union funds.

And now Kathy Jackson, hoist on her own petard. The question is, why was the alleged siphoning off of millions in union funds not detected years earlier?

The answer is simple, according to one senior former union official: people were more concerned with internecine conflict than with the welfare of union members.

“The meltdown of the HSU in Victoria was a proxy fight, first of all on whether the union was in the Right or the Left. And there was a 20-plus-year process of people becoming involved directly or funding the union, who had no real care about the success of the union, but cared about where the votes went at the end of an electoral process,” he says.

“The whole Victorian machine became focused on internal politics, and that allowed the tragedy, allowed crooks in.”

In New South Wales, where Michael Williamson ran the show, the situation was a little different but just as bad, if not worse.

“Kathy helped herself to a lot of money but it was all just pretending she was something she wasn’t,” the source says. “Williamson was engaged in wholesale racketeering.”

In NSW, the industrial right was split into two camps, one centred around the Transport Workers’ Union and HSU and the other the Australian Workers’ Union and Electrical Trades Union and some others. “Williamson was central to the internal politics of the NSW Right, so people looked the other way,” the source says. “Ask no questions, tell no lies.”

Another former union leader tells essentially the same story, but goes to a broader issue: “The structures that exist between the [Labor] party and union movement encourage bad behaviour. Even people going in with the right ideals often find the only way to exercise power is to engage in poor behaviour.”

That means slush funds, rorting the rules to entrench yourself and deny your enemies, deliberately opaque processes, and stacking numbers to guarantee greater influence within the union movement and the party.

Joe de Bruyn and the SDA

So to the example of de Bruyn and the SDA, which represents retail, fast-food and warehousing industries, and which was until recently the nation’s largest union by membership.

The very short history of the union is that it was a product of virulently anti-communist forces in the postwar years and the last major relic of the Labor split. The Catholic conservative “groupers” of B. A. Santamaria’s National Civic Council seized control in the 1950s and never let go.

“Then the rules were changed so there couldn’t be counterattacks from the Left,” says one union critic of the SDA, who is well versed in the complex machinery of its oligarchy.

“There’s a whole range of impediments foreign to a democratic structure. There has not been a genuine contest in 15 to 20 years. And the leadership have access to vast election funds to fight off any challenge. Like the HSU did, and like a lot of other unions do.”

There is one major difference, though. There is no suggestion that the shoppies leadership was ever in it for individual gain.

“One thing you could say about the shoppies is nobody’s even taken a cent. One thing the groupers and the commos had in common was they were all straight as a die,” says one union source. “There were no hands in the till.”

But they, too, had an agenda not related to workplace issues. A moral one.

As Josh Cullinan, current bete noire of the shoppies, said in an interview with Fairfax a couple of months back, recalling his 2002 job interview with the union. “I was told … that if I worked for them I’d have to join the ALP and I’d have to attend ALP conferences,” Cullinan recalled. “And [at the conference] I was to vote against abortion, rights for homosexuals and [vote for] a whole lot of conservative agendas.”

But those agendas, it now appears, came at a huge cost to members. Not millions of dollars, as in the case of the HSU, but hundreds of millions.

Back at the end of May, the Fair Work Commission found an agreement between Coles and the SDA covering 77,000 workers resulted in many of them being paid well-below-minimum wages set by the safety-net award system.

Cullinan’s parsing of the agreements between the SDA and other major employers such as Coles and McDonald’s, finds they also breach award conditions, at a total cost to workers of some $150 million a year.

So, how does this gross exploitation of workers relate to the shoppies’ moral agenda? Let’s back up a couple of steps.

The influence of unions in Labor Party policy formulation is proportional to their size. That means signing up a lot of members, no easy thing in the high-turnover industries in which the shoppies operates, where the workforce is young, heavily casually employed and with a high turnover – about 70,000 a year.

The solution was to enlist the aid of employers in signing up people, even to the extent of reimbursing companies for the cost of making payroll deductions for union fees.

Louise Tarrant, former national secretary of United Voice, a union that, like the shoppies, represents workers in low-paid, mobile, precarious jobs – in child and aged care, cleaning and hospitality – has some sympathy for the approach.

“It’s incredibly hard to organise low-wage, high-turnover industries. The SDA built a model predicated on having a long-term relationship with significant employers. When access is critical, employer neutrality is vital,” she says.

“So it breeds some reciprocity, but it should never be at the cost of basic workers’ rights.”

The SDA’s cosy relationship with employers might have been bad for its members, but it was advantageous for its leadership, providing it with the numbers that gave it greater say in union and party forums, greater clout in factional horsetrading and a bigger voice in parliament.

Questioning ALP affiliation

The common thread to the HSU and SDA – that union members suffered because a leadership cabal was engaged in pursuing other agendas – goes to a much broader problem. A lot of people now question whether unions and the Labor Party are still good for one another.

This shows in the number and type of unions that still remain formally affiliated to the party. It’s noteworthy, for example, that the union that supplanted the shoppies as the nation’s biggest, the nurses’ union, is unaffiliated.

Fewer than half of Australian union members belong to affiliated unions and the “typical” union member is now a white-collar professional and likely to be a member of an unaffiliated union, says Professor Ray Markey, of the Centre for Workforce Futures at Macquarie University.

“The unions with influence in the Labor Party are not representative of the union movement generally,” he says.

By his count, before the election, about half the former union officials in the federal parliament came from just three blue-collar unions, of which the shoppies was the most represented.

One official with an unaffiliated white-collar union said they were simply uninterested in the factional games and personal ambitions that came with affiliation.

“As soon as affiliation comes, so come all the apparatchiks and the wannabes. It’s mighty healthy for a union not to have that. Certainly the political games and factional power plays within outfits like the HSU and shoppies helped them lose sight of their members.”

Maybe it’s time the union movement stepped back a bit from electoral politics and devoted more time and effort to its fundamental task of representing workers.

Tim Lyons, former assistant secretary with the ACTU, now with the progressive think tank Per Capita, certainly thinks so. In a recent long essay on the subject, he lamented:

“People in the movement focus on, and spend workers’ money on, general issues of campaigning and electoral politics because it’s easier than talking about and doing real organising, and certainly easier than beginning fundamentally to transform unionism.

“For a social movement such as unionism the real game is elsewhere … Real social movements drive electoral politics, they don’t respond to it. Most politicians are followers, not leaders.”

Most importantly, he said, the common perception that unions were first and foremost the campaigning arm of Labor did them permanent damage “in the minds of members and non-unionists alike”.

“If you’re told the answer to your problems is the way you vote, and you vote as suggested but nothing changes, this has consequences for the messenger.”

He’s far from alone in his thinking. Another former union leader tells The Saturday Paper that “the current mechanisms of affiliation don’t work in either side’s interest. It’s toxic for both.”

And another: “That ALP relationship is so limiting. Unions should be about pushing. Politics is about controlling.”

It’s way past time, they all say, that the movement got back to its prime purpose of looking after its members. Breaking down the oligopolies, bringing greater democracy and transparency to union affairs.

Because we’ve seen the undesirable places to which the alternative leads. Such as the dock of the Melbourne Magistrates’ Court.

This article was first published in the print edition of The Saturday Paper on Sep 24, 2016 as "Unions poisoned by ALP alliance". Subscribe here.

Mike Seccombe
is The Saturday Paper's national correspondent.