At a hearing of the House economics committee on Thursday, Liberal MP and committee chair Tim Wilson grilled AustralianSuper chief executive Ian Silk and Cbus head Justin Arter around their investment in the troubled company through industry fund-owned asset manager IFM Investors, a number of whose directors sit on the Tandem board.
Mr Wilson suggested Tandem, whose subsidiary had been the subject of a class action from Shine Lawyers alleging it had breached Fair Work requirements for thousands of workers, had “dudded contractors of their full entitlements”.
“How do you feel about that since you’re a major investor in IFM? Industry funds have 50 per cent of their boards being representatives of unions, so if [Tandem] were to start dudding workers of entitlements, surely that’s inconsistent with the standard they apply to others,” Mr Wilson said.
Mr Silk said AustralianSuper had been in contact with IFM about the situation at Tandem.
“We have made inquiries to IFM, we’ve had a preliminary response and we’ve sought further information. This information has only arisen yesterday,” Mr Silk said.
“We’ve had an initial discussion with IFM and have asked for a comprehensive briefing – we will get that briefing in the coming days.”
He added that the fund – which managed money on behalf of 2.4 million workers, and was one of a number of default funds for the Communications Union – would be “concerned” if misconduct had occurred at the company.
“Australian Super’s board and organisation are concerned with any improper practices that occur in any organisations we are associated with if we are an investor into organisations accused of that behaviour,” Mr Silk said.
“It’s not just that half the board is comprised of union officials – it is inconsistent with the ethos of this organisation.
“Australian Super has adopted asset ownership principles that set out a range of factors we expect to see in organisations we invest in directly and that invest our capital, IFM being one of those. We expect all organisations we deal with to follow the principles and they in this context go to appropriate practices being employed by organisations in relation to labour relations.”
However Mr Silk said he “did not expect” that Tandem had “dudded workers” in the way Mr Wilson had described, and wanted to “get to the facts” before making judgements.
When asked what action the fund would take in response to Tandem’s practices, Mr Silk said “the first option would be engagement” with IFM.
Mr Arter echoed Mr Silk’s comments, saying the fund had “strong guidelines” for engaging with fund managers on ethical grounds.
“But we are talking about a hypothetical, so we would await facts and make a determination, and the range of options we have would be the same as Australian Super,” Mr Arter said.
