ACTU defends union trustee/directors

The Australian Council of Trade Unions (ACTU) has hit back at a national newspaper report suggesting unions have been extracting millions of dollars a year from industry funds via trustee/directorships.

Further, the peak union body has also denied that the payments received from the industry funds represent a onflict of interest.

The ACTU has issued the denial in the face of reports published in The Australian newspaper which pointed to $5.4 million in fees being directed towards trade unions by industry funds - something which the peak union body also claims does not represent a money making exercise for the unions involved.

"The ACTU, and unions who appoint directors, do not make money from the appointment process. It is, by and large, a reimbursement process," an ACTU letter to the newspaper said. "In all practical terms, this is not a conflict of interest."

VIEW ALL

View all

The newspaper's report has caused a certain amount of controversy because its allegations coincide with the Senate having rejected Government legislation which would have seen superannuation funds required to appoint a minimum one-third independent directors inclusive of an independent chairman.

The ACTU's letter said that unions, as "50 per cent owners of trustee companies, are entitled to appoint officials as trustees".

"When these appointments are made, the unions allow employees to take time away from their regular duties to attend to the role of trustee/director," it said. "Rather than having an unnecessary complication of the employee having two employment contracts (one with the Union and one with the Fund) and for administrative ease, the Fund pays the Union the pre-determined Director's fee as a compensation for the time the official spends in undertaking their superannuation director's role."

The ACTU letter claimed this was "neither an unusual or complex feature".

The ACTU went on to say that whilst it was a matter for each Union and the relevant Official, "there should be no suggestion that the union officials appointed by the ACTU as trustee directors are double dipping - in the case of the ACTU, the fee is paid to the organisation because this is where release from the regular job occurs. The official does not personally receive a wage and the director fees".