Some­thing rot­ten in state of unions

Po­lit­i­cal in­ter­fer­ence in the work of labour watch­dog breeds graft

Sunday Times - - Business Newsmaker - By CHRIS BAR­RON

● Trade unions are fleec­ing their mem­bers, and the gov­ern­ment is mak­ing it dif­fi­cult to hold them ac­count­able, says for­mer labour regis­trar Jo­han Crouse, who was fired by the labour min­is­ter for try­ing to do just that.

The Na­tional Coun­cil of Trade Unions re­cently called on the gov­ern­ment to hold the coun­cil’s or­gan­i­sa­tions ac­count­able amid claims and proof of ram­pant cor­rup­tion and mal­ad­min­is­tra­tion in unions.

Crouse, who was the labour regis­trar for 20 years, says he has “ab­so­lutely no doubt” about these claims. But he says the call by union lead­ers for their or­gan­i­sa­tions to be held ac­count­able is “just rhetoric. They don’t want to be held ac­count­able, that’s the bot­tom line.”

He says he also finds it dif­fi­cult to take se­ri­ously Cosatu pres­i­dent Sdumo Dlamini’s re­cent re­mark about union in­vest­ment com­pa­nies be­ing “a cancer rip­ping us all apart”.

He agrees with him, but points out that it was Cosatu that got Labour Min­is­ter Mil­dred Oliphant to in­ter­vene when Crouse as labour reg­u­la­tor tried to en­force ac­count­abil­ity on a Cosatu af­fil­i­ate.

Cosatu, which was in­stru­men­tal in set­ting up many of the union in­vest­ment com­pa­nies that union lead­ers have plun­dered, told the min­is­ter to re­verse his court ap­pli­ca­tion to dereg­is­ter the ANC-aligned Chem­i­cal, En­ergy, Pa­per, Print­ing, Wood and Al­lied Work­ers Union af­ter it had failed to pro­duce fi­nan­cial records for five years.

Re­gard­less of Cosatu’s pub­lic pos­tur­ing, this demon­strates its real at­ti­tude to cor­rup­tion, he says.

At stake was R6-bil­lion worth of in­vest­ments con­trolled by Cep­p­wawu. When Crouse re­fused Oliphant’s in­struc­tion to sus­pend his court ap­pli­ca­tion to have it dereg­is­tered, she fired him in 2015.

Af­ter an al­most two-year bat­tle, the Labour Court found that her de­ci­sion was “ir­ra­tional and in­valid” and or­dered his re­in­state­ment.

By then, he’d al­most reached the of­fi­cial re­tire­ment age of 65 and didn’t have time to re­in­state the dereg­is­tra­tion.

The re­sult was that Cep­p­wawu was never dereg­is­tered, sus­pended or placed un­der ad­min­is­tra­tion, and still hasn’t sub­mit­ted proper fi­nan­cial state­ments.

When Crouse tried to dereg­is­ter the union, it had been in contravention of the Labour Re­la­tions Act for five years.

Unions have con­sti­tu­tional checks and bal­ances, but these are eas­ily cir­cum­vented by strong lead­ers who run unions with a small clique of se­nior of­fice bear­ers who are close to them, he says.

They are past masters at play­ing the sys­tem for their own ends, which rarely align with the in­ter­ests of their mem­bers.

“You have these in­di­vid­u­als who know the weaknesses of unions. They [prey] on these weaknesses and take over unions to get their hands on the bank ac­counts which they loot.”

In ad­di­tion to their “mas­sive salaries”, they usu­ally have their eyes on what is con­sid­ered to be the main prize, which is an in­vest­ment com­pany where there’s a lot of money.

They will “usu­ally do any­thing to be part of the de­ci­sion-mak­ing in that in­vest­ment com­pany”, he says.

As long as they’ve got a strong base, they can get away with any­thing. They don’t have to worry about the branches.

“I can as­sure you mem­bers have got very lit­tle say in their unions,” says Crouse.

Only the “right” shop ste­wards and other mem­bers are in­vited to meet­ings.

“They hear about de­ci­sions at meet­ings to which they weren’t in­vited.”

Mem­bers from branches would com­plain to him in strict con­fi­dence that meet­ings were held with­out them even know­ing.

“They are usu­ally so scared of the con­se­quences if they tackle the le­git­i­macy of de­ci­sions that they’d rather just join an­other union.”

It is ex­tremely dif­fi­cult for the regis­trar to check that de­ci­sions made are valid, he says.

It was Cep­p­wawu’s in­abil­ity to prove that it held the meet­ings re­quired of a reg­is­tered union that, along with its fail­ure to pro­duce fi­nan­cial records, made him seek to put it un­der ad­min­is­tra­tion, and cost him his job.

“It’s a mine­field. The sys­tem is ripe to be taken by any­one who knows the sys­tem.”

The regis­trar is sup­posed to see that there is proper fi­nan­cial con­trol, “but you are ham­strung”.

All he has to go on are the fi­nan­cial state­ments, where these ex­ist. Many unions don’t sub­mit fi­nan­cials as they are obliged to do by law.

Where fi­nan­cial state­ments are avail­able, they’re of­ten en­tirely in­ad­e­quate.

“The au­di­tors just sign off on a lot of things. They do the ba­sic checks and bal­ances but don’t ask the ques­tions.”

In ef­fect, they fa­cil­i­tate cor­rup­tion be­cause they’re not do­ing a proper job, he says.

The now-dis­graced au­dit firm KPMG looked af­ter Cep­p­wawu’s books.

Crouse said he saw com­ments by Cep­p­wawu in­vest­ment com­pany’s lawyers where they said au­di­tors had signed off on things they were not sup­posed to sign off on.

When he brought his ur­gent ap­pli­ca­tion, Labour Court judges were scathing about what they saw and said the mat­ter needed to go to court.

But af­ter he was pushed out by the min­is­ter, the act­ing regis­trar with­drew the ap­pli­ca­tion, and it never went to court.

Po­lit­i­cal in­ter­fer­ence in the work of the labour reg­u­la­tor has be­come “the stan­dard, the norm”, says Crouse.

“It can hap­pen that you put a union un­der ad­min­is­tra­tion or can­cel its reg­is­tra­tion, which makes big prob­lems in the al­liance.”

Dereg­is­ter­ing Cep­p­wawu would have weak­ened Cosatu and the gov­ern­ing al­liance po­lit­i­cally and fi­nan­cially.

“Unions pay mas­sive af­fil­i­a­tion fees to Cosatu, which is one of the ma­chines of the gov­ern­ment and ANC in elec­tions.

“So the regis­trar now first has to check with the min­is­ter.”

What came out in his Labour Court case was that the regis­trar is em­pow­ered by the Labour Re­la­tions Act to act in­de­pen­dently of the min­is­ter or Depart­ment of Labour.

But he says the depart­ment has been re­struc­tured “so that the link of the regis­trar to the min­is­ter and di­rec­tor-gen­eral is more di­rect than in the past”.

“The regis­trar now re­ports to the DG or min­is­ter.”

The over­sight and mon­i­tor­ing role of the regis­trar has been blunted, mak­ing it eas­ier for cor­rup­tion in the unions to flour­ish, says Crouse.

These in­di­vid­u­als take over unions to get their hands on the bank ac­counts and loot them

Jo­han Crouse

For­mer labour regis­trar

Pic­ture: Phill Ma­gakoe

For­mer labour regis­trar Jo­han Crouse says the labour min­is­ter’s un­will­ing­ness to of­fend ANC al­liance part­ners un­der­mines ef­forts to keep unions hon­est.

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