Land­mark rul­ing for bar­gain­ing coun­cil

It paves the way for the re­turn to sol­vency and sta­bil­ity of the MEIBC

The Star Early Edition - - NEWS - Di­neo Faku

THE LABOUR Court has placed the Metal and En­gi­neer­ing Bar­gain­ing Coun­cil (MEIBC) un­der ad­min­is­tra­tion and ap­pointed Afzul Soobe­daar as its ad­min­is­tra­tor, in a land­mark rul­ing that paves the way for the re­turn of the bar­gain­ing coun­cil to sol­vency and sta­bil­ity.

Act­ing Judge Sean Sny­man, said in his judg­ment yes­ter­day that Soobe­daar’s ap­point­ment was for a pe­riod of six months cal­cu­lated from yes­ter­day and might be ex­tended for fur­ther pe­ri­ods as agreed with the MEIBC’s man­age­ment com­mit- tee (Manco). Soobe­daar was a se­nior com­mis­sioner at the Com­mis­sion for Con­cil­i­a­tion, Me­di­a­tion and Ar­bi­tra­tion and acted as me­di­a­tor be­tween em­ploy­ers and labour fol­low­ing the Marikana mas­sacre.

Sny­man also ruled that the ad­min­is­tra­tor had pow­ers to con­trol funds of the MEIBC and op­er­ate or close ex­ist­ing bank ac­counts.

“The ad­min­is­tra­tor shall de­velop a plan on the prospects of re­ha­bil­i­tat­ing the MEIBC to sol­vency and func­tion­al­ity which is to be fur­nished to Manco and the Depart­ment of Labour within a pe­riod of four months from the date of grant­ing this or­der” .

The ad­min­is­tra­tor was also tasked with adopt­ing a bud­get for 2016/17 within six weeks of the grant­ing of the judg­ment.

Trade union Sol­i­dar­ity ap­plied for the MEIBC to be placed un­der ad­min­is­tra­tion.

Sol­i­dar­ity deputy gen­eral sec­re­tary, Mar­ius Crou­camp, said yes­ter­day that the or­der was a nec­es­sary step to en­sure that the MEIBC was res­cued from go­ing un­der.

“We be­lieve that the ap­point­ment of an ad­min­is­tra­tor will en­sure that the MEIBC is saved from regress and will be fi­nan­cially sound again. The preser­va­tion of the coun­cil is cru­cial for the sta­bil­ity of the steel in­dus­try that is al­ready un­der se­vere pres­sure,” said Crou­camp.

MEIBC’S gen­eral sec­re­tary, Thu­lani Mthiyane, said yes­ter­day: “We are over­joyed by the ap­point­ment of the ad­min­is­tra­tor. Our team has man­aged to keep the coun­cil run­ning un­der very dif­fi­cult cir­cum­stances,” he said.

The judg­ment is sig­nif­i­cant for strug­gling bar­gain­ing coun­cils as the Labour Re­la­tions Act (LRA) does not make pro­vi­sion for a bar­gain­ing coun­cil like the MEIBC to be placed un­der ad­min­is­tra­tion.

All that it does is to make pro­vi­sion for the wind­ing up of the bar­gain­ing coun­cil.

The MEIBC is a dis­pute res­o­lu­tion re­source for the metal in­dus­try re­spon­si­ble for en­forc­ing in­dus­try col­lec­tive agree­ments and has a mem­ber­ship of more than 10 000 com­pa­nies, which em­ploy around 300 000 em­ploy­ees. How­ever, it failed in its du­ties with the sit­u­a­tion be­com­ing ex­ac­er­bated last year amid a se­vere fi­nan­cial crunch which re­sulted in monthly ex­penses go­ing un­paid.

The MEIBC has also been plagued with mal­ad­min­is­tra­tion, in­clud­ing the fail­ure to pro­duce an­nual fi­nan­cial state­ments, and no per­ma­nent fi­nan­cial man­ager.

Sny­man said in court pa­pers, that an au­dit by Deloitte & Touche last year found that the com­pany had con­tra­vened the LRA in that its fi­nan­cial state­ments for 2015 had not been ap­proved.

The au­di­tors also ex­pressed their con­cerns about the MEIBC be­ing a vi­able go­ing con­cern as it had a deficit of R23 mil­lion and its cur­rent li­a­bil­i­ties ex­ceeded its as­sets by R1.1m.

Even more wor­ry­ing was that the coun­cil’s dis­pute res­o­lu­tion func­tions had “all but col­lapsed”. The MEIBC was also un­able to fund the Dis­pute Res­o­lu­tion Cen­tre, said Sny­man. It was pro­jected that the coun­cil would have to at­tend to 6 500 cases this year which it would be able to do. How­ever, in ad­di­tion to that, the coun­cil had a back­log of 2 700 cases.

“The sit­u­a­tion is truly dire,” said Sny­man.

The judg­ment is the first of its kind for a bar­gain­ing coun­cil and can be com­pared with a busi­ness res­cue process, of­ten used in the pri­vate sec­tor to save a busi­ness from fail­ing.

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