According to The Daily Telegraph, Melhem requested an annual fee from cleaning company Cleanevent in 2010 when discussing the extension of the Enterprise Bargaining Agreement (EBA), which would keep the company’s pay low.
John-Paul Blandthorn, a former organiser at the AWU, told the Trade Union Royal Commission yesterday that Melhem had asked Cleanevent for a payment.
“I could read the expression on their face that this wasn't something [Cleanevent officials] would normally want to engage in,” he explained.
Blandthorn added that the company told the union it was struggling to compete with “black market labour” and could not afford to keep up with penalty rates.
“Mr Melhem sort of stated to the company that ... they get a good service out of the AWU and its delegates... and that they should look to pay some sort of service fee to the AWU for that type of work,” he said.
It was alleged that the original amount proposed was $10,000, but Melhem told Blandthorn to increase the fee to $25,000.
Blandthorn told the commission that he did not inform the national union office about the arrangement because it was not his duty to do so.
The deal is alleged to have cost workers $2 million per year in unpaid penalty rates.
On Monday, Melhem reportedly denied that he had claimed the $25,000 was necessary to secure the extension of the EBA.
In his statement to the hearing, he claimed that the service fee was for his union branch to provide industrial representation for casual employees who were not union members.
He also argued that Blandthorn was responsible for negotiations with the company.
A letter dated 2010 – which was signed by Cleanevent’s HR manager Michael Robinson – read that the company had agreed to pay “employees’ union fees” up to $25,000 on the condition that the AWU would not commence any enterprise bargaining.
Opposition spokesman John Pesutto said that both Melhem and Blandthorn, who are now employed by the Victorian government, should be stood down after giving conflicting evidence.
Former secretary of the Australian Workers Union (AWU) Victorian branch and current MP Cesar Melhem is facing allegations that he accepted a “service fee” to keep union members’ wages down.