EMPLOYERS will urge the Heydon royal commission to investigate allegations that unions are receiving lucrative undisclosed commissions after coercing companies into signing up to costly but inferior income protection insurance schemes. The Australian Industry Group said yesterday unions were pressuring employers to sign up to insurance products that are more costly to companies and offer fewer benefits to employees, including union members. In evidence to be given to the royal commission into union governance and corruption, the Ai Group accused unions of pushing the products in order to get big commissions from the companies. It estimated that up to 30 per cent of the insurance protection money paid by an employer was paid as a union commission. Due to the significant commission, unions often refused to accept an employer’s offer to provide equivalent or better benefits to employees through an alternative provider, the Ai Group said. The Ai Group is finalising a submission that will be made to the commission in coming weeks. An Ai Group spokesman said the issue was a major concern to employers and should be examined by the commission. The Construction Forestry Mining and Energy Union accused employers of using the royal commission to try to cut the entitlements of workers. Dave Noonan, the national secretary of the union’s construction division, said employers were attempting to dictate the work of the commission. He said income protection schemes provided “considerable benefits to workers’’. According to the Ai Group, the “inappropriate revenue streams’’ from commissions had helped unions offset the impact of declining union membership revenue. The Ai Group also raised its concerns about the operations of the schemes in a recent submission to the Productivity Commission’s inquiry into public infrastructure. It told the inquiry the lucrative revenue streams helped some unions offset the impact of the fines they received for engaging in unlawful conduct. The Ai Group criticised a number of construction industry redundancy funds for regularly distributing their surplus income back to unions and some employer groups. “It is not appropriate for employers to be coerced to pay into funds where a portion of the amount contributed ends up with unions, and some employer associations,” the submission says. “With construction industry redundancy funds there should be a requirement for the level of employer contributions to bear a rational relationship to a reasonable scale of employee redundancy benefits. “At present, the employer contribution level is whatever the unions can coerce employers to contribute, typically through industry pattern agreements. This approach drives up construction costs because contribution levels far exceed the level that would be necessary to provide a reasonable level of redundancy benefits to employees.” It says the problems were identified by the Howard government’s Cole royal commission “but have remained unaddressed and are progressively getting worse’’. Unions reject the employer complaints, arguing the Fair Work Act prohibits coercion so the allegations by business do not stand up to scrutiny. The ACTU argues that redundancy funds are a feature of the construction industry given it is a highly mobile workforce that moves from job to job. It says the funds provide various benefits beyond redundancy payments, such as counselling and health and well being programs for workers. theaustralian.au/national-affairs/policy/industry-accuses-unions-of-payoffs/story-fn59noo3-1226890636426
Posted on: Sun, 20 Apr 2014 19:47:25 +0000
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