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Corrupting Benefits Bill will deliver important enterprise bargaining changes

"The Australian Industry Group welcomes the passage through Parliament last night of the Fair Work Amendment (Corrupting Benefits) Bill 2017. The Bill will deliver important changes to Australia's enterprise bargaining system," Innes Willox, Chief Executive of the Australian Industry Group said today.

"Some unions are currently misusing the enterprise bargaining process to derive very lucrative and inappropriate revenue streams from products, services and funds which employers are forced to pay for through the terms of enterprise agreements.

"For example, some unions often insist upon provisions being included in enterprise agreements requiring that particular income protection insurance products be purchased by the employer. Typically these products are much more costly for the employer and provide fewer benefits to the employees than other insurance products readily available in the market. However, because of the very substantial (and undisclosed) commissions being paid to the unions by the insurance companies that they are aligned with, the unions typically refuse to accept an employer's offer to provide equivalent or better benefits to employees through an alternative insurance provider.

"Many employers have advised Ai Group that they can purchase income protection insurance for as little as 1/5th of the cost of the insurance products that the unions force them to purchase, while providing more generous insurance benefits to employees. This highlights that unions and the insurance companies that they are aligned with are reaping huge, inappropriate financial rewards at the expense of employers, employees and consumers.

"The Corrupting Benefits Bill will require bargaining representatives for a proposed enterprise agreement to disclose any financial benefits that the bargaining representative, or a person or body reasonably connected with it, would or could reasonably be expected to derive because of a term of the proposed agreement. Substantial civil penalties apply to those who breach these provisions.

"The Bill will stamp out the hidden interests in bargaining that are currently adversely impacting upon employers and employees. This is a vital reform to the enterprise bargaining system that was recommended by both the Cole Royal Commission and the Heydon Royal Commission," Mr Willox said.

Media enquiries: Tony Melville – 0419 190 347