Government places construction branch of CFMEU under guardianship after approval of new laws

The CFMEU has risen up in protest following the federal government’s historic decision to place the union’s controversial construction and general division into administration, with the loss of 270 jobs.

Attorney General Mark Dreyfus made the announcement Friday morning, saying it was “in the public interest” to take an extraordinary stance against the union, following allegations of endemic corruption and ties to criminal gangs in the construction industry.

Victorian lawyer Mark Irving KC has been appointed administrator after being appointed by the Fair Work Commission earlier this month.

“The CFMEU Construction and General Department’s management plan comes into effect immediately,” he said.

A joint statement from New South Wales State Secretary Darren Greenfield, Deputy Secretary Rob Kera and State President Rita Mallia said the union was “shocked and dismayed” to learn through the media that officers had been sacked.

“These officials are hardworking, dedicated union leaders whose sole motivation was to improve the conditions of thousands of CFMEU members. They are proud to have achieved this,” the statement said.

“The actions of the state and federal government have done nothing but undermine the rights and circumstances of thousands of CFMEU members and their families.

“This whole farce was born out of an unfounded media and government stunt. This government’s lack of due process and fundamental democratic rights is disgusting and simply un-Australian.”

John Setka, former CFMEU State Secretary in Victoria, who was accused of appointing bikers and organised crime members as union representatives, declined to comment on the news.

He has previously denied the allegations against him.

According to Nine Newspapers, the news is expected to lead to the resignation of about 270 union officials.

Friday’s move comes after the Labor Party and the Coalition reached a bipartisan agreement to pass legislation needed to place the union under administration.

The proposal was passed by the Senate on Monday by a vote of 39 to 10, after the government gave in to coalition demands to extend the minimum term of office to three years, plus conditions for the governor to report to parliament every six months and attend Senate budget meetings.

While there will be no legal ban on political donations by the CFMEU during its tenure, coalition shop floor spokeswoman Michaelia Cash said on Monday she had received assurances from Mr Watt that safeguards would be put in place.

The CFMEU has strongly criticised the new law, with national secretary Zach Smith saying earlier this week that the union was taking allegations of criminal activity seriously and that officers were being fired or dismissed.

But, he said, the allegations had not yet been tested in court.

“Until the allegations are tested by the legal system, people and organizations have the right to a fair trial,” he said.

Murray Furlong, chief executive of the Fair Work Commission, pledged to work with Mr Irving in an “open and transparent” manner to restore good governance and voluntary compliance and establish high standards of accountability within the union.

The Masters Builders Association has welcomed the government’s swift action to bring the law into effect just a day after the bill received Royal Assent, allowing Irving to “get straight to work”.

“This culture has existed for decades and has suppressed productivity and increased construction costs at the expense of communities, taxpayers, jobs and small businesses,” said Denita Wawn, CEO of Master Builders.

“Everyone in the construction industry recognises the important role that unions play in the workplace, but it is clear that some within the CFMEU have lost their way.

“The relationship between employers and unions must be constructive and mutually respectful and we hope this is the first step towards achieving that goal.”

But Ms Wown has again called for a tougher version of the now-defunct Australian Building and Construction Commission.

“For lasting and sustainable change, long-term regulatory reform is needed,” she said.

“The federal government must act now to establish a dedicated construction watchdog with real teeth.”