Political interference and the unions

Posted on February 11, 2017


The attempt by labour minister Mildred Oliphant — including a couple of lengthy and costly court battles — to interfere in trade union administration was slapped down hard on January 26. The labour appeal court ruled that her instruction to the registrar of labour relations to withdraw action against a defaulting Cosatu union and her subsequent sacking of the registrar was “irrational, invalid and procedurally unfair”.

This whole sorry affair brought to the forefront areas of deep concern to the labour movement, not the least being political interference. But is also, again, raised the question of the state of the unions and the role played by investment companies.

It now seems likely that the newly reinstated registrar, Johan Crouse, will go ahead with the action he started in June 2015 to place the affairs of the Cosatu-affiliated chemical, energy, pulp, paper and wood union (CEPPWAWU) under administration. This will mean the assets of the union, including those of its investment company, will be held in trust for the members.

Prior to January, 2015, a registrar could only deregister a defaulting union. And CEPPWAWU clearly qualified, not having filed properly audited financial or membership reports since 2010.

Yet all unions and employers organisations are required to provide audited statements regarding finances and membership within six months of the end of every financial year. Failure to comply can mean deregistration. However, although several of the larger, established unions have sometimes been up to three years behind with their reports, they have been allowed to continue functioning.

The same leeway was extended to CEPPWAWU as the registrar exercised the discretion allowed by the Labour Relations Act (LRA). As a senior department official noted: “Deregistration would mean the members being left out in the cold, with some leaders still holding the cheque book.”

In the case of CEPPWAWU, the union is apparently in debt and has been for years. But its investment company is estimated to hold assets worth anywhere between R3.65 billion and R6 billion. As a result, the official added, Crouse was always reluctant to deregister any union that still held “worker money”.

So, although CEPPWAWU was mired in controversy for several years and in gross default regarding transparency, Crouse only took direct action after January 2015. He as able to do so because an amendment to the LRA allowed him to take a defaulting union to court and apply to have the union and its assets put under independent administration. Crouse duly notified the leaders of CEPPWAWU of his intention if they did not provide the required public accounts.

Within days he was instructed by Oliphant’s office to stop the process. He went ahead, was accused of insubordination, and removed as registrar. His deputy, Malixole Ntleki, was appointed in his place and withdrew the administration application, although CEPPWAWU had still not met the legal requirements.

“It has come to my attention that the registrar did not suspend the Labour Court application as instructed and went ahead with the application,” a letter from Oliphant’s director-general Thobile Lamati noted. However, the registrar, although appointed by the minister, is supposed to operate independently, in principle, “without fear or favour”.
The labour court upheld this principle when Crouse’s union, PSA (formerly Public Servants’ Association) took the matter to court. Oliphant and her department then appealed as the matter dragged on. In the meantime there were complaints that the CEPPWAWU leadership had failed for years to call quorate meetings of the national executive and four of the union’s seven regions were in rebellion.

However, general secretary Simon Mofokeng, who has been involved in several questionable business deals over the years, remained unmoved. The union, under his leadership, also went on to co-sponsor the controversial World Federation of Trade Unions conference in Durban last year.

Now, courtesy of the labour courts, we are back to square one. In the process it can only be hoped that all the details — all the “dirty washing” — will be exposed. There are definitely lessons to be learned — and not only for the unions.