Glass manufacturer ACI made secret payments totalling almost $500,000 to the Australian Workers' Union during negotiations over major restructuring, the trade unions royal commission has heard.
The payments were agreed with former AWU Victorian assistant secretary Cesar Melhem, said former employee relations manager for ACI, Michael Gilhome.
This was to give the union support in its training for a major restructure and to cover Mr Melhem's costs in travelling around work sites.
"They just sent the invoice through and I would approve it after knowing it was in the ballpark of what we'd agreed we would pay," Mr Gilhome told the commission in Sydney on Wednesday.
The commission heard the payments coincided with negotiations on a new enterprise bargaining agreement but Mr Gilhome denied they were for "industrial peace".
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He agreed with counsel assisting the commission, Jeremy Stoljar SC, that the arrangement was not disclosed to workers at ACI's factory when they voted on a new enterprise bargaining agreement.
"I didn't really see a great conflict there," Mr Gilhome said.
The company's former CEO has denied any knowledge of the payments of around $160,000 a year between 2003 and 2005.
Peter Robinson, who headed the firm from 2003 to 2005, told the commission he had no idea about the money paid to the AWU in Victoria, which at the time was headed by now Labor leader Bill Shorten and his assistant secretary, Mr Melhem.
"I couldn't understand what this was about. I was shocked," Mr Robinson said of learning about the payments when contacted by the royal commission.
Mr Gilhome, however, said he spoke to Mr Robinson "about the concept of that amount being paid into the training.
The commission also heard ACI paid a $5,400 invoice sent by the AWU for "paid education" that was equal to the cost of 12 annual union membership fees.
Mr Gilhome agreed that the invoice was not for education or for the fees of any union members.
"The invoices to that extent are false?" Mr Stoljar asked.
Mr Gilhome replied: "Well to that extent they are, I suppose, yes. But might I say, it was quite a common thing in those years for companies and industries generally to pay for membership for some unions in order to have jobs going on."
The hearing resumes on Thursday.
