Businesses have been warned it could be illegal for them to sponsor the donkey ride, sausage sizzle, climbing wall, children’s face painting, the petting zoo or toy train at a family picnic day organised by trade unions.

The national construction union and electrical trades union have held an industry picnic day for families since 1982, but have received legal advice that they can no longer accept sponsorship from businesses to help fund the annual events.

The tradition sees the construction industry around the country shut down usually on the first Monday in December to allow workers to attend the event.

The unions said they paid for the event in Adelaide on Monday from their own reserves without the usual sponsorship from businesses because they may face the risk of heavy fines and jail under new federal government laws.

The Fair Work Amendment (Corrupting Benefits) Act 2017 can make it an offence for employers to give cash or other payments to a union that represents its employees. The changes were introduced in response to recommendations from the Royal Commission into Trade Union Governance and Corruption.

A spokesman for Employment Minister Michaelia Cash said the legislation allows “genuine” payments for a “picnic day” that “benefits” employees.

“The royal commission found a major Chinese property developer paid the CFMEU NSW over $100,000, including three separate payments for ‘picnic day sponsorship’, in a deal to avoid entering into enterprise agreements and enabling its workers to be paid less,” the spokesman said. “The government’s legislation has banned these types of corrupting and illegitimate payments.”

CFMEU South Australia secretary Aaron Cartledge said company owners risked big fines and jail if they sponsored the picnic day held under a union banner.

“Our independent legal advice is that employers who contribute to the picnic day could be exposed to significant penalties. We understand employers have also received advice to this effect from their own peak bodies,” Mr Cartledge said.

“Given the history of over-reach that minister Cash’s office and agencies have, nobody in our industry is keen to make themselves a target of these laws.”

Communications Electrical and Plumbing Union South Australia secretary John Adley said he was “flabbergasted” the new law could prevent employers from sponsoring the annual picnic day.

“This event is about everyone bringing their families together to have a relaxing day out, eat a sausage and just be part of a community at the end of the year,” he said.

Mr Adley said unions funded the picnic on Monday because it was too late to cancel, but would likely stop running the event because of the new law.

John Thring, a director of construction company Torrens Building and Civil in South Australia said he had sponsored the picnic for the past five or six years, but was not asked to sponsor it this year.

“I believe the sponsorship and the union picnic is fundamentally a great idea because it brings the employees, employers and clients all together,” he said.

“It also allows the families and the children to spend time together.”

John Wolf, a retired member of the CFMEU, who attended the picnic with his wife and two grandchildren on Monday, said the new law was “disastrous”.

He has attended the annual picnic most years since 1985 with his children and grandchildren.

“We worked 50 to 60 plus hours per week and this is one day we can give something back to our families,” he said. “You hardly get see them when you are working hard.”

The Melbourne event was held at the Flemington showgrounds with fliers promoting free rides and monster trucks. In NSW union members were told they could attend various venues including Luna Park and Taronga Zoo. A spokeswoman for the CFMEU said unlike the smaller Adelaide branch, the union’s larger Victorian and NSW branches did not rely on businesses to fund their picnic days. Instead, they raised money through ticket sales and contributions built into their enterprise agreements.

This story Administrator ready to work first appeared on Nanjing Night Net.