Vic MP fined $20k over union memberships

Benita Kolovos
Cesar Melhem has been fined for breaching the Fair Work Registered Organisations Act

Victorian Labor MP Cesar Melhem has been fined more than $20,000 for his role in registering hundreds of people as Australian Workers' Union members without their knowledge.

Federal Court Justice Debra Mortimer on Tuesday fined the embattled MP $20,590 for breaching union membership laws between 2008 and 2013, while he was state secretary of the AWU.

During the five-year period, 730 workers from five companies - Cleanevent Australia, Winslow Constructors, BMD Constructions, Geotech, the Australian Jockeys' Association and the Victorian Jockeys' Association - were made members of the AWU by their employers, who handed over $488,008 to the union.

The overwhelming majority of these workers were signed up without their knowledge, in a breach of union rules.

"Melhem's conduct was a clear and serious example of the most senior office holder within the AWU Vic, and a senior office holder within the national AWU structure, failing to discharge his powers and duties in the best interests of the AWU," Justice Mortimer said in her written findings.

"It could not possibly have been in the best interests of the AWU for its own membership rules, including as to amounts payable for membership, to be bypassed, in a serious and sustained way."

She said the court was not able to make a finding as to Melhem's motive but described the conduct as deliberate.

"It was conduct repeated, in something of a pattern and with an apparent method, over a number of years, across a range of employers and a state and national association," Justice Mortimer said.

Melhem admitted to the eight contraventions of the Fair Work Registered Organisation Act as part of a civil settlement with the Registered Organisations Commission, ending a four-year investigation into his tenure at the AWU, which began during the Trade Union Royal Commission in 2015.

A criminal investigation into the matter was dropped last year.

Despite the admissions, Justice Mortimer said the MP "certainly showed no contrition or regret".

Melhem was first elected to the upper house in 2014, representing the western metropolitan region.

A Victorian government spokeswoman said the fine was a matter for Mr Melhem, who is still a Labor MP.

He stood down as Labor's whip in the Legislative Council when allegations of wrongdoing were first aired at the royal commission.

Federal Labor described the royal commission as a "witch-hunt" against its then-leader Bill Shorten, who led the AWU between 2001 and 2007.