South Africa: Labour Department Pushes Unions To Fix Accounts

Last Updated: 21 August 2012
Most Read Contributor in South Africa, September 2016

An attempt by the registrar of trade unions to clean up the considerable administrative mess within the labour movement has inadvertently provided ammunition for internal battles within Cosatu.

This is the assessment among a number of the federation's affiliates that have been shown, in a leaked report, to have contravened the Labour Relations Act (LRA) by not submitting audited accounts, sometimes for three years or more.

But while this has been dubbed a "crisis" in sections of the media, it is far from that. In fact, there is nothing new in trade unions being often years behind in submitting their financial and membership accounts, despite the provisions of the law.

Even a decade ago, trade union registrar Johan Crouse admitted that a number of Cosatu-affiliated unions, among them the National Education Health and Allied Workers Union (Nehawu) were in arrears with their audited financial and membership reports. Legally, they could have been deregistered at the time.

However, the constitution gives the right to all workers to form and join trade unions, while legislation such as the LRA provides the rules by which they are accepted within the body politic.

Where large unions such as Nehawu were functioning well in representing members and negotiating wages and conditions, it was decided to "cut them some slack".

There was also recognition within the Department of Labour that many of the unions had capacity problems in terms of producing properly audited figures.

Similar problems, regarding administrative capacity, also apparently apply in the department itself. Last year the Department of Labour, of which the registrar's office is part, decided to attempt to regularise the situation by trying to ensure that all unions provided - as the law demands - annual audited reports.

To do so, it was resolved to approach the four main labour federations, starting with Cosatu, rather than deal individually with the defaulting unions.

A report showing that 16 of Cosatu's 21 affiliates were liable for deregistration for not having provided annual financial and membership accounts was given to the federation last month. It was also announced that the Communication Workers Union (CWU) was being deregistered.

The CWU opposed the action and the matter is now before the Labour Court and should be heard next month.

According to the department's report, only the National Union of Mineworkers (NUM) and the SA Society of Bank Officials were up to date. This was a feather in the cap of NUM, which has attracted criticism from both its own members and the wider movement following the recent acceptance by general secretary Frans Baleni of a R40 000 a month pay rise, taking his monthly salary to R77 000. Fingers are now being pointed at NUM as having leaked the department's report in an attempt to deflect criticism at next month's Cosatu congress.

This seems to be part of internal wrangles, because there are also allegations from other Cosatu affiliates that NUM's 300 000 membership figure is inflated to give it greater authority in bargaining and more votes at the Cosatu congress.

However, by the end of this week, the Federation of Unions of SA, the National Council of Trade Unions and the Confederation of SA Workers' Unions should also be approached about their affiliates that are not legally compliant. Although there was no comment from the Labour Department, it appears that this is part of an effort by the department to get the federations to join the registrar in putting pressure on defaulting unions to abide by the law.

Labour brokers

Courts are increasingly bending over backwards to protect the rights of workers employed by labour brokers and judges are likely to go beyond whatever agreement is on paper between the employer and the employee, according to Audrey Johnson, a senior associate at law firm Edward Nathan Sonnenbergs. She was commenting on a recent judgment by the Labour Court in Cape Town which, on reviewing a Commission for Conciliation, Mediation and Arbitration (CCMA) decision, found Mondi Packaging was the employer of a worker who had been placed by Adecco Recruitment Services with the paper and plastics group.

Parliament is conducting hearings on two labour bills, one of which is the Labour Relations Act Amendment Bill. This says that, with certain exceptions, a worker who is employed for longer than six months is deemed to be employed for an indefinite period and must be paid the same as a permanent employee doing similar work.

Johnson says Khululekile Dyokwe was employed by Mondi from 2000 to 2002, but in December 2002 he was told his contract would be terminated. For reasons not clear, he stayed on at the company and there was proof he received Mondi payslips in 2003.

In July 2003, he was told he would have to sign a new contract with Adecco. Dyokwe, who didn't read English, signed a contract limited by time although it had no termination date, and his wages dropped by 20 percent.

His employment was summarily terminated because of his age. When he went to the CCMA, it was held that Adecco, not Mondi, was Dyokwe's employer.

Judge Anton Steenkamp ruled, among other things, that an employee of a labour broker cannot be dismissed under a clause that says the contract terminates when the client no longer needs that employee.

Johnson says the decision has shown that, irrespective of whether or not the department's changes become law, the courts are likely to examine the issue of labour broking very closely in future.>/p>

Previously published by Business News on August 16, 2012.

Edited by Ellis Mnyandu

With contributions by Terry Bell and Wiseman Khuzwayo.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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