December 2015 Sydney, Australia — Explosive revelations from the Royal Commission into Trade Union Governance and Corruption have rocked the Australian Workers’ Union (AWU), uncovering a web of misconduct that spans years and raises serious questions about the union’s internal governance and its loyalty to the workers it claims to represent.
The Commission, established to investigate allegations of wrongdoing within trade unions, laid bare a troubling pattern of unethical practices within the AWU. Central among the findings were secretive payments from major companies, inflated membership figures, and a culture that critics say prioritized cosy relationships with employers over the interests of workers.
One of the most damning aspects of the Commission’s findings involved large payments made to the AWU by companies such as Thiess John Holland and Spotless. These payments, often described as “donations” or “training fees,” were made with little to no transparency and were frequently unrelated to any services actually provided.
At the EastLink tollway project in Victoria, the AWU received approximately $300,000 from Thiess John Holland between 2004 and 2007. The Commission found minimal evidence that training services were rendered, sparking allegations that these payments were made in exchange for industrial peace and a pliant union presence on the worksite.
Justice Dyson Heydon, who led the inquiry, noted these payments reflected “a disturbing departure from the union’s duty to its members,” suggesting the AWU had become “a facilitator of employer interests, rather than a defender of worker rights.”
The AWU was signing off on agreements that left workers worse off, while ensuring companies were protected from industrial action in exchange for “donations,” “training fees,” and deals benefiting the AWU’s income protection provider, Chifley’s.
Perhaps the most stinging criticism to emerge from the inquiry was that the AWU, in its conduct, had effectively become a “bosses’ union.” Rather than standing up to management in defence of workers, the union was found to have actively cooperated with employers in ways that undercut wages, conditions, and worker representation.
“The AWU, at times, acted more like a human resources department than an independent union,” the report said. Workers were left unaware of deals being struck in their name, many of which favoured corporate efficiency over fair treatment or proper negotiation.
Critics have gone further, accusing the union of outright betrayal. “They weren’t fighting for the workers — they were selling them out,” said one former AWU member who gave evidence to the Commission. “They got too close to the bosses, and the members were the ones who paid the price.”
The Commission also uncovered widespread misuse of membership practices. In several cases, companies were invoiced for union fees en masse, often without employees’ knowledge or consent. This practice inflated membership numbers and gave the appearance of stronger support than actually existed, while filling union coffers with employer-funded contributions.
These arrangements, the Commission argued, compromised the union’s independence and placed it in a conflicted position when it came to representing workers in disputes.
Josephine Hodgson waited over a decade to speak the truth: “The union sold us out.”
In front of the trade union royal commission, the 67-year-old former mushroom picker told how the AWU stood by while she and her colleagues were sacked and replaced by cheaper labour hire workers.
Hodgson and three former colleagues—some with up to 16 years’ service at Chiquita Mushrooms—were pushed out in 2004 after a dodgy enterprise deal stitched up behind closed doors. At the same time, the AWU was pocketing $4,000 a month from Chiquita, supposedly for “paid education leave.” The commission found the union did nothing to earn it.
What the workers did get was betrayal. A new EBA slashed wages by shifting pay from per-kilo to hourly rates and paved the way for labour hire replacements. AWU organiser Frank Leo backed the company every step of the way—even telling workers that their sackings were “what the company needed to do.”
“I thought it was illegal,” said Sharon Dellevergini, who worked there for 13 years. “But he didn’t seem to care.”
She didn’t learn about the secret payments until years later: “I was dumbfounded. But it made sense, given how little support we got from the union.”
Hodgson put it bluntly: “You pay your money and you get cheated.”
At the time, Bill Shorten led the AWU nationally. Asked whether workers were told about the $4,000 payments, he said: “I’m sure Frank would have done that.”
They weren’t. And the AWU didn’t just fail these women—it sold them out for cash.
The AWU sold out low-paid cleaners in a dirty backroom deal that slashed wages and handed a $2 million windfall to cleaning giant Cleanevent, the trade union royal commission has heard.
While cleaners were stripped of penalty rates and paid as little as $18 an hour—the AWU pocketed up to $25,000 a year from Cleanevent in a secret “membership fees” arrangement.
The catch? Many of the names the company submitted to the union were fake or duplicates—cleaners unknowingly counted twice to inflate the union’s membership numbers. That bogus boost handed the AWU more clout at ALP conferences, more delegates, and more political power.
At the time, AWU state secretary Cesar Melhem—now a Victorian Labor MP—personally signed off on the deal. The result: cleaners got ripped off, while the union and Cleanevent cashed in.
Commission lawyers laid it bare: “The benefits to Cleanevent and the AWU are obvious. The persons who miss out are the workers.”
Once again, the AWU sold out the very people it was meant to protect—and did it for cash and political gain.
The findings have cast a long shadow over prominent political figures once connected to the AWU. While no criminal wrongdoing was attributed to former Prime Minister Julia Gillard, her past legal work for the union kept her name in the spotlight during the inquiry.
Other AWU leaders denied deliberate misconduct and claimed the deals struck were standard practice in a complex industrial relations environment. Nonetheless, the report concluded that systemic governance failures left members vulnerable and misinformed.
Justice Heydon recommended a raft of reforms, including potential criminal investigations, stricter oversight of union finances, and new legislation to ensure transparency in employer-union relations.
The federal government responded with promises to toughen laws around union governance. Then-Employment Minister Eric Abetz said the report was “a sobering indictment of a union culture that abandoned its members in favour of corporate cooperation.”
In the wake of the scandal, the AWU pledged internal reforms but denied widespread wrongdoing. Yet for many workers, the damage to the union’s credibility is already done.
“This was supposed to be our voice,” one construction worker told reporters. “Instead, they were shaking hands behind our backs.”
Not much has changed in 2025 with the AWU still doing dodgy deals with the bosses and signing off on enterprise agreements that are weaker so that they can have their income protection provider Chifley Financial Services written into agreements and receive kickbacks for every employee on the job even if they choose not to be members. This publication has already covered this practice here.
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