The Turnbull government has flagged sweeping new laws to tackle trade union corruption after a Royal Commission found the labour movement was riddled with "widespread" and "deep-seated" misconduct.
The final report by Commissioner Dyson Heydon referred key union figures including the disgraced former Health Services Union Kathy Jackson and Victorian Labor MP Cesar Melhem to prosecutors for possible charges. But it made no adverse finding against Labor leader Bill Shorten, who was head of the Australian Workers Union when it committed a series of breaches detailed in the report.
Labor and the unions swiftly dismissed the report as a political witch-hunt, saying that the cases highlighted by Mr Heydon were isolated and did not represent systemic problems among union officials.
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.
"If its recommendations are substantially adopted, if the lessons of this report are learned, the trade union movement will emerge much stronger," Mr Turnbull said.
Describing the report as a "watershed moment" for unions, Mr Turnbull vowed to make union reform an election issue if the Senate blocks new laws.
Senator Cash said the report showed that "the existing laws … are not adequately protecting the hard-working union members and they have not been effective in dealing with and stamping out the blatant misconduct and alleged criminal behaviour".
Opposition workplace spokesman Brendan O'Connor said criminal behaviour by unions should be dealt with by police. The Commission by contrast was a "politically motivated witch-hunt", he said, pointing to Mr Heydon's acceptance of an invitation to speak at a Liberal Party function – a revelation that led to unsuccessful calls for his resignation.
Labor has proposed its own union governance reforms but the Coalition says these are too weak.
Mr Shorten, who is on leave, did not issue a statement on Wednesday.
In a blistering assessment of the state of unions, Mr Heydon – a former High Court judge - concluded the Commission had likely uncovered only 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".
Mr Turnbull backed this view, saying that while most union officials worked "honestly and capably" for their members, the misconduct found in the report was "not a case of a few rotten apples spoiling the whole barrel".
Mr Heydon's report refers 45 individuals for possible criminal charges or civil action, including the AWU, which it accuses of a raft of breaches including receiving tens of thousands of dollars in secret payments from companies while not pursuing the best deals for members in workplace negotiations.
A number of companies have also been referred to police and prosecutors, including engineering firm John Holland Pty Ltd, food grower Chiquita Mushrooms and Winslow Constructors Pty Ltd.
As well as calling for a new union watchdog, Mr Heydon recommended tougher penalties for misconduct by officials, stricter rules about financial disclosure by unions and new civil penalties for unions that don't keep proper records.
As a starting point, the government will introduce a toughened bill to create a union watchdog in the style of the corporate regulator, the Australian Securities and Investments Commission, as recommended by Mr Heydon. A previous, weaker version of that law has already twice been rejected by the Senate.
It will also bring back a bill to re-establish the Australian Building and Construction Commission to oversee workplace relations in the building industry. The Senate has already rejected that bill once.
Australian Chamber of Commerce and Industry chief executive Kate Carnell said the commission uncovered "serious issues endemic in the trade union movement that warrant a serious response from politicians from both sides and on the crossbenches".
ACTU secretary Dave Oliver said rejected claims of "widespread unlawful corrupt conduct within the union movement".
He said unions were willing to discuss reform with the government but called on Mr Turnbull to "allow some time and space for these discussions to occur, and not try and rush through any kind of legislation in the first part of next year".
He said if there was an "enormous iceberg" of misconduct then a 21-month Royal Commission that grilled 505 witnesses should have been able to find it.
with Matthew Knott
Nicole Hasham is environment and immigration correspondent for The Age, The Sydney Morning Herald, Brisbane Times and WAtoday.
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