“[T]he evidence establishes there was conscious and deliberate conduct by Mr Melhem in seeking out and facilitating the recruitment of new members to the AWU outside the process set out in the AWU Rules, and the payments of significant sums of money for those recruitments, which amounts generally bore little if any correlation to the membership rates set by the AWU Rules,” Judge Mortimer said.
“For reasons that remain unexplained, almost all of the payments were attributed to services which were not provided or were provided in a limited way. All this conduct, in my opinion, was not inadvertent, or negligent, or careless; it was deliberate.”
The judgement represents a win for the Coalition government’s Registered Organisations Commission, which took legal action against Mr Melhem and the union. The court issued the civil penalties totalling $20,590 in finding Mr Melhem had breached provisions in the Fair Work Registered Organisations Act.
The decision is likely to reignite the Victorian state opposition’s calls for the upper house MP to stand down as chair of a parliamentary committee.
The court heard that Cleanevent Australia made payments to the union totalling $40,000 between 2010 and 2013 for membership contributions for 164 workers “in circumstances where the Cleanevent employees were not members of the AWU pursuant to the AWU’s rules”.
Mr Melhem was also found to have accepted payments to register 347 workers from Winslow Constructions, 45 from BMC Constructions, 18 from Geotechnical Engineering and 156 from the Victorian Jockeys’ Association.
The court heard that the AWU sent Winslow Constructions invoices including for amounts ranging from $9945 to $23,166 to pay for safety training and membership dues.
The AWU invoiced BMC $14,300 for occupational health and safety inspections that were not provided. The court also heard the jockeys’ association paid the AWU an annual service fee of $30,000 and that some of its members had been signed up as members of the union without their knowledge. It was also alleged that Geotech paid the AWU $17,160 for the union registration of its employees.
The Federal Court said its role was not to examine evidence from the Abbott government’s 2014-2015 Royal Commission into Trade Union Governance and Corruption, in which many of the revelations about Mr Melhem’s conduct were raised.
“Nor does this Court take into account what observations or findings may have been made by that Royal Commission. This Court proceeds on the evidence before it, which is of a more limited kind,” Judge Mortimer said.
“The evidence on which this Court has proceeded is different, and in making the orders in this proceeding and in imposing penalties on Mr Melhem, this Court does not make, nor refuse to make, the kind of findings the Royal Commission made.”
Registered Organisations Commissioner Mark Bielecki said officers of unions and employer associations were responsible for ensuring that organisations and their branches complied with obligations under its Act.
“Officers have personal obligations and the risk of civil or criminal penalties for not complying with laws that apply to their role as an officer,” he said.
Anna Patty is Workplace Editor for The Sydney Morning Herald. She is a former Education Editor, State Political Reporter and Health Reporter.