AWU - Cesar Melhem Federal Court Proceedings

21 May 2018

The Registered Organisations Commissioner has commenced proceedings in the Federal Court against the Australian Workers’ Union (AWU) and its former Victorian Branch Secretary, Mr Cesar Melhem, alleging multiple contraventions of the Fair Work (Registered Organisations) Act 2009 (Cth) (RO Act).

The allegations relate to the AWU's failure to keep an accurate register of members during the period from 2008 to 2013, when Mr Melhem was the Victorian Branch Secretary. The Commissioner alleges that the AWU entered in its register of members hundreds of persons who were not members and failed to remove from its register over 2,000 unfinancial members in breach of various provisions of the RO Act.

The Commissioner further alleges that the conduct engaged in by the AWU and Mr Melhem constituted a scheme pursuant to which the membership of the AWU was artificially inflated and the AWU Victorian Branch received payments that were not legitimately due to it. The Commissioner alleges that such conduct was in breach of Mr Melhem's obligations as an officer in relation to the financial management of the organisation under sections 285, 286 and 287 of the RO Act.

The Commissioner seeks the imposition of civil penalties on the AWU and Mr Melhem.

The Registered Organisations Commission will be making no further comment at this time.

Background

As part of its final report, the Trade Union Royal Commission (TURC) made a number of referrals to the General Manager of the Fair Work Commission (FWC) relating to potentially serious contraventions of the RO Act by the AWU and its former Victorian Branch Secretary Mr Cesar Melhem (the AWU referrals).

The AWU referrals were based on a series of case studies involving a scheme of conduct in which large sums of money were paid by employers to the Victorian Branch of the AWU between 2007 and 2013.  The TURC found that in exchange for cash payments, the Victorian Branch of the AWU agreed not to seek better terms and conditions for certain of its members and that the arrangements involved both the false inflation of membership numbers and the falsification of documents.  The TURC found, amongst other things, that the AWU registered workers as members who did not know that they were registered as members of the AWU.

The TURC also found that while it would not otherwise have been difficult for the AWU to obtain better terms and conditions for the workers, all involved in the arrangements benefited except the workers that the AWU was supposed to be representing.

On 2 November 2016, the FWC commenced an independent investigation in relation to the AWU referrals.  The investigation was transferred to the Registered Organisations Commission upon its establishment on 1 May 2017 and the Commission continued with its own independent investigation which it concluded on 19 March 2018.