The Australian Workers Union did a side deal with a cleaning company which resulted in it’s members getting less than half what they would have under a new award, in return for a $25,000 payment which artificially inflated the union’s membership.

The Trade Union Royal Commission heard that the Victorian branch of the AWU signed a side letter with Cleanevent which meant a WorkChoices era industrial agreement, which contained no penalties rates, could continue. The deal saved the company about $2 million per year.

Under the agreement the company sent the union a list of its employees and agreed to pay their union memberships.

According to Counsel assisting the royal commission, Jeremy Stoljar SC the benefit to the union was an inflated membership numbers. Some of the employees, who were unaware they had been signed up to the union, were actually agreed paying union fees.

It also meant that the Victorian AWU got extra votes on the union’s national body, and more delegates to the Labor Party’s conference, and therefore influence over Labor policy and selection of political candidates.

“The persons who miss out are the workers. Cleanevent’s employees, or at least its casual employees, appear to have been significantly worse off under the MOU [memorandum of understanding] than they would have been under the relevant 2010 award.”

Under the agreement which the union signed, casual cleaners, who mostly worked after hours and weekends, got $18.14 an hour, while under a new award they would have got $50.17 an hour. A level 3 cleaner working on Sundays got $19.86 an hour instead of $41.44, about 121 per cent more.

Mr Stoljar said the royal commission would examine if union officials broke the Fair Work Act by entering into an agreement which benefited themselves and the company, but which was detrimental to their own members. It would also examine if they had breaches the Victorian Crimes Act by falsifying accounting records or producing false or misleading accounts.

The Royal Commission has previously investigated if the TWU inflated it’s membership numbers. Mr Stojlar said the latest hearings suggested this problem was not confined to one union.