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Employers and unions who make secret payments could soon face up to 10 years in prison

Prime Minister Malcolm Turnbull Photo: Saeed Khan/ AFP/ Getty Images.

The Turnbull government is planning legislation to ban secret payments between companies and unions.

Under the law, announced by prime minister Malcolm Tunrbull today and due to hit parliament on Wednesday, employers and unions who make payments with the intent to corrupt will face up to 10 years in prison.

Breaches could result in a $900,000 fine for individuals, and a $4.5 million fine for corporate entities.

The prime minister said it was about restoring and defending “the rule of law” to Australia’s industrial and building sector.

The laws come as the government is locked in a political battle with the Labor opposition over the Fair Work Commission’s proposed cuts to penalty rates for workers in hospitality, retail and fast-food sectors.

Opposition leader Bill Shorten plans to introduce legislation today to block the Fair Work Commission decision, but the government has begun to attack the Labor leader, accusing him of hypocrisy for deals he struck with business scrapping penalty rates while head of the Australian Workers Union.

Turnbull said thousands of workers are already being paid less on Sundays than the Commission’s proposed reduced rates, because of secret deals between companies and unions.

“This is a very important priority,” said Turnbull, adding that it was a gap in the law that Justice Dyson Hayden identified in his royal commission into the building industry.

“It is unacceptable that employers are making secret payments to unions.”

Employment minister Michaelia Cash, alongside the prime minister, said “this government is committed to ensuring our workplaces in Australia are transparent.”

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