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Trade Union royal commission refers Cesar Melhem, Kathy Jackson to prosecutors

Royal Commission release sparks a torrent of Malsplaining Bill Shorten escapes royal commission findings ACTU dismisses royal commission findings as a ‘blatant political exercise’

The Turnbull government will ask the Federal Parliament to urgently pass laws ensuring the integrity of unions and the construction industry following the trade union royal commission handing down its findings.

Among 45 current and former union officers referred to police, the Fair Work Commission or other authorities was Victorian MP Cesar Melhem and former Victorian union boss Kathy Jackson.

Both now face possible criminal prosecutions.

Federal opposition leader Bill Shorten had no findings against him.

In his final report released on Wednesday, Commissioner Dyson Heydon concluded Australian unions were riddled with “widespread” and “deep-seated” misconduct.

Mr Heydon referred Mr Melhem, the Australian Workers Union Victorian secretary until former 2013 and now a state MP, to Victorian prosecutors over a string of accusations relating to corruption and the creation of false invoices.

He also referred Ms Jackson, the former national secretary of the Health Services Union, to prosecutors for possible charges over obtaining property and financial advantage by deception.

Prime Minister Malcolm Turnbull said the commission’s final report found widespread impropriety among union officials.

“This is not a case of a few rotten apples spoiling the whole barrel,” he said. “There are many union officials, and widespread cultures, of impropriety and malpractice.”

He pledged to introduce laws to reinstate the controversial Australian Building and Construction Commission in the first sitting week of parliament next year.

A police taskforce attached to the royal commission will also be funded to continue investigating referrals and ensure criminal allegations are dealt with.

The moves will make industrial relations a key battleground in the 2016 federal election, with Mr Turnbull pledging to make trade union governance a “major issue” if Labor, the Greens and crossbenchers did not support his new laws.

Mr Heydon’s final report stated that Victoria’s Mr Melhem had been “responsible for numerous actions favouring the interests of the union over the members which may be breaches of legal duty”.

Cesar Melhem at his electorate office after the commission handed down its finding. Photo: Jason South

Mr Melhem on Wednesday said he would fight any allegations brought against him, and would stay on as a state MP. “I’m not going anywhere,” he said.

The commission was set up under former prime minister Tony Abbott in what Labor and unions have dismissed as a political witch-hunt.

In a blistering preamble to the final report, Mr Heydon concluded the commission had probably only uncovered the most egregious examples of misconduct.

“These aberrations cannot be regarded as isolated. They are not the work of a few rogue unions, or a few rogue officials. The misconduct exhibits great variety. It is widespread. It is deep-seated.

“It would be utterly naïve to think that what has been uncovered is anything other than the small tip of an enormous iceberg.”

He said it was clear there was room in the union movement for “louts, thugs, bullies, thieves, perjurers”.

And former Health Services Union national secretary Kathy Jackson, the report found, might have “committed a crime by obtaining $250,000 from an employer by false pretences”.

The commission ran for nearly two years and held 189 days of hearings involving 505 witnesses.

The union movement roundly rejected the findings, with ACTU secretary Dave Oliver branding the inquiry a blatant political stitch-up.

Mr Oliver said the royal commission was not about finding out about potential corruption.

“The royal commission was always about prosecuting an ideological, partisan agenda,” Mr Oliver said.

And Dave Noonan, the national secretary of the Construction Forestry Mining and Energy Union’s construction division, dismissed the royal commission as a multi-million dollar witch hunt.

“In two years of hearings, a royal commission with tens of millions of dollars of taxpayers’ money, an army of of investigators and an army of police would find a few things going wrong in any organisation.”

In all, 45 individuals and organisations were referred for possible charges.

Prime Minister Malcolm Turnbull and Employment Minister Michaelia Cash strongly indicated that many of the report’s 79 recommendations would be adopted by the government in the form of new laws, amounting to a significant tightening of union regulation.

Premier Daniel Andrews did not front the media on Wednesday, and did not talk with Mr Melhem about the allegations made against the Labor MP by the royal commission.

A spokeswoman for Mr Andrews said the recommendations made by Mr Heydon were “serious and significant”.

Asked what steps would be taken against Mr Melhem as a result of the royal commission’s findings, Mr Andrews’ spokeswoman said: “It is not appropriate to comment on something that may result in court proceedings. In Victoria, under Labor anyone who is found to have acted illegally should feel the full force of the law.”

Victorian opposition industrial relations spokesman Robert Clark demanded Mr Andrews act immediately to remove Mr Melhem from the Labor Party. “He can’t wait for months or years for the courts,” Mr Clark said.

Mr Clark said that, while there were criminal offences possibly arising against Mr Melhem, there were clearly unacceptable practices revealed by the trade union royal commission’s final report.

“If he doesn’t act he is condoning that Cesar Melhem took payments from behind workers’ backs and sold them out in wage negotiations,” Mr Clark said.

Liberal senator Eric Abetz said the report showed there had been “completely unacceptable” and corrupt activity at the highest levels of trade unions.

“Unfortunately, the ACTU and other Labor leaders were not willing to call out corruption for what it is,” he said.

The government’s efforts to re-establish the commission ABCC were blocked in the Senate in August.

With Nicole Hasham

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