A former construction manager has told the unions royal commission Labor leader Bill Shorten proposed a fully funded role for a union organiser as part of a deal on a major road project, when Mr Shorten was a union boss.
Stephen Sasse, the former head of industrial relations for the Thiess-John Holland construction joint venture that built Victoria's EastLink freeway, gave evidence on Monday that contradicted Mr Shorten's earlier evidence to the inquiry.
Mr Sasse told the commission Mr Shorten suggested during negotiations in 2004 that John Holland pay for the salary and car of an Australian Workers Union (AWU) organiser over the three years of the project at a cost of $100,000 a year.
"His suggestion was that an organiser would be basically appointed full-time to the project and funded by us," Mr Sasse said.
Mr Shorten told the commission in July he did not recall any discussion with Mr Sasse about funding an organiser.
Mr Sasse said he was negotiating with the AWU in order to keep the militant Construction, Forestry, Mining and Energy Union off the job.
In a June private interview with commission lawyers, made public at Monday's hearing, Mr Sasse revealed he had threatened to use workers on non-union Australian Workplace Agreements (AWAs) as part of a strategy to get the AWU, led then by Mr Shorten, to agree to less restrictive workplace conditions.
"He swallowed it beautifully," Mr Sasse said in the interview.
Mr Sasse could not specify in court where or when the proposal was made.
The court heard he left a meeting with Mr Shorten with an understanding that the AWU organiser would cost $100,000 a year - $75,000 in salary plus a car - for three years.
However under cross-examination by Mr Shorten's barrister, Neil Clelland QC, Mr Sasse said the $300,000 total "may have been illuminated by a conversation with Mr Shorten, I can't accurately recall that".
Mr Sasse told the commission while he and Mr Shorten had made a "high-level agreement" on the deal, he considered it finished when, at the end of 2004, Mr Shorten brought the CFMEU onto the EastLink project anyway, telling the construction boss it was for reasons he would not understand.
In his written statement to the commission, Mr Sasse said no payments were ever made by John Holland to the AWU but he became aware of payments totalling $300,000 from the joint venture company to the union when they were revealed by the inquiry.
He said the total payments "approximate the $300K (sic) initially discussed between Shorten and me and that the relevant documentation was deliberately falsified".
Mr Sasse was shown invoices from the AWU to the joint venture for various charges, including research on back pain, workplace training, advertising in a union magazine and attendance at a population forum.
Asked if a $33,000 invoice for back strain research appeared "bogus", Mr Sasse said he feared it might be, but said he had not authorised payments to the union during the project because he left his position at the end of 2004.
The hearing continues on Tuesday.
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