The SDA Will Cut Your Pay

Two peculiarities set the SDA apart from Australia’s other major unions. The first of these is that the SDA was implacable in its opposition to legalizing same-sex marriage. This position stemmed from the union’s ties to the Catholic church. Since the 1940s, SDA has been heavily influenced by right-wing Catholicism and was one of the few unions to be captured by “The Groupers,” a hard-right, anti-communist Catholic ginger group which split from the Australian Labor Party (ALP).

Although the SDA later re-affiliated with the ALP, it has never forgotten its right-wing socially conservative roots. Former prime minister Gough Whitlam, a consistent advocate for ending discrimination against LGBT people, labeled long-standing SDA leader Joe de Bruyn “the only Dutchman who hates dykes.”

Today, the SDA is a major power broker in the ALP. The union’s opposition to reforming homophobic laws is arguably the main reason why Kevin Rudd and Julia Gillard’s Labor governments did not legalize same-sex marriage. Mere months after Joe de Bruyn retired in 2015, the ALP’s federal conference approved changing the party’s platform to support marriage equality with a standing ovation. An unimpressed de Bruyn remained seated.

The second oddity of the SDA is its coziness with employers. The union defends enterprise bargaining agreements that are so bad, the Fair Work Commission has overturned some for undercutting minimum wages and conditions. This strategy, however, is the key to the SDA’s power. In return for selling bad deals to its members, major retailers encourage new employees to sign up to the union upon induction. This boosts the SDA’s membership, making it one of the largest unions in the country.

Because of this strategy the SDA has an oversized share of delegates at Labor conferences and disproportionate control over the ALP. The union’s influence over the Labor Party allows officials in their pocket into Parliament to perpetuate the SDA’s socially conservative agenda. In return for this sweetheart deal, the SDA gives retail businesses a “commission” taken from the union dues its members pay. In the decade between 2005 and 2015, this commission was worth up to $40 million.

Just What Was Joe de Bruyn Paid For?

The SDA’s status as bargaining agent for retail workers entitles it to 50 percent representation on the board of the retail super fund, REST. It also gives the union the power to railroad retail workers into joining REST, despite the fact that it significantly underperforms when compared with union-backed superannuation funds. Worse, a part of the fees paid to REST by its members end up in the pockets of SDA figures like de Bruyn, who receive large salaries for their services to the fund. The conflict of interest couldn’t be more blatant.

The SDA’s 2014 financial report disclosed that de Bruyn and his deputy were paid a total of $364,133, and it’s safe to assume de Bruyn wasn’t earning less than his deputy. This means that in 2014, the union paid him at least $182,066. For comparison, in 2021, the average annual income for a full time retail worker was $68,187.

In addition to this, thanks to his power in the SDA, REST appointed de Bruyn as a director in 1988. He served in this role until 2019. According to REST’s 2019–20 remuneration report, the fund paid him an extra $173,050 for his services.

Superannuation funds are meant to appoint directors on the basis of their financial expertise. The short biography of de Bruyn which REST has included in their 2019 annual report is long on his political connections, highlighting, among other things, his role as SDA national president and his position on Australian Labor’s National Executive. The report is, however, decidedly short on financial knowledge — de Bruyn’s bachelor’s in agricultural science included.

It’s not clear for what de Bruyn was being paid. Whatever it was, however, it wasn’t his results: REST is one of the worst performing industry super funds. In 2019, it was ranked a dismal thirty-fourth for a five-year return on its members’ investment.

UniSuper — an industry super fund whose members are mainly employed in tertiary education — is a good comparison. The left-wing National Tertiary Education Union (NTEU) helps to manage the fund. In 2019, SuperRatings ranked UniSuper first among Australian funds for returning a belting 18.4 percent on its members’ investments. By contrast, REST generated a dismal 5.96 percent.

It’s not just a question of scale. Although UniSuper manages twice the funds of REST, in one year it generated three times the return on its members’ investment. UniSuper pays its directors $59,220, plus a little more if they sit on board committees — just over a third of de Bruyn’s SDA wage. Crucially, the NTEU’s representatives who serve on UniSuper’s board don’t pocket their remuneration. Instead, they give their income back to the NTEU, because representing their members’ financial interests is part of their job as union officials.

An Inherent Conflict of Interest

Despite REST’s poor performance, the SDA uses its position as a bargaining agent for retail workers to funnel their mandatory super contributions into the fund. In 2019, the SDA signed a deal with retail giant Kmart that forced its employees to contribute to REST rather than choose a higher performing fund. In return, Kmart workers received a paltry pay rise of as little as one cent per hour. The Fair Work Commission found that the deal was unlawful because it left employees worse off than the minimum award rates. The Commission only approved the deal after the SDA backed down over the clause forcing retail workers to contribute to REST.

Being forced into REST doesn’t just mean poor returns. It often means that workers — especially young retail workers with multiple jobs — are forced to hold multiple superannuation accounts linked to different jobs. Holding more than one super account means paying fees for all of them. This costs workers $1.8 billion a year. Super accounts are often linked with insurance policies and because only one policy can pay out at a time, this means many workers are also paying for insurance they can never use.

According to the Australian Securities & Investments Commission (ASIC), the SDA’s position as bargaining agent isn’t the only shady way REST tries to hold onto its members. In 2021, ASIC filed a suit against REST for misleading its members. ASIC alleged that REST had falsely claimed that members weren’t allowed to transfer their contributions out of the fund to a fund with higher returns, even after changing jobs.

As the bargaining agent for its members, the SDA has a legal responsibility to act in their best interests. Not only has REST acted against the interests of retail workers — as has the SDA — it rewards SDA officials like Joe de Bruyn handsomely for their role vouchsafing this arrangement.

The losers of this backroom dealing are workers, located in one of Australia’s most badly paid sectors, whose retirement savings are being mismanaged by right-wing unions who don’t have their interests at heart. In order to guarantee that workers’ deferred wages can serve to enrich them, rather than their employers, we need to break the cozy ties between unions and bosses.