SFO complaint laid about Meatworkers Union

April 11th, 2012 at 3:00 pm by David Farrar

3 News reports:

Affco has accused the union representing its employees of not complying with its statutory reporting requirements, and says there are “irregularities” in its financial accounts.

The New Zealand Meat Workers and Related Trades Union and Affco have been involved in a tit-for-tat series of strikes and lockouts since February, fighting over changes to union members’ collective employment agreement.

In the latest move, Affco says it is laying a complaint with the Serious Fraud Office on behalf of its employees over the payments they make to the union.

CEO Hamish Simson says the union has not declared its total income, and has failed to disclose what it does with its members’ contributions.

“It appears from the union’s published financial statements that only a fraction of its total income has been declared,” says Mr Simson.

“Affco workers contribute over $500,000 to the union each year, paying $5.95 each per week. Affco workers represent less than 10 percent of the 23,000 members the Union says it has and yet it only declares revenue of just over $700,000 per annum”.

The Meatworkers Union is affiliated to Labour, and donated $18,000 to them at the last election.

Looking at their accounts, I would say that levies are paid to branches, and a fraction of those levies are paid to the main union as capitation fees.

Now if those branches are all incorporated societies also, then probably all is okay. But if they are not, and do not publish accounts, then there is a case they are concealing their overall income. are required to be publicly registered. Do those who pay the fees think they are joining the NZ or a separate branch union?

The only other incorporated society that has the words “Meat” and “Workers” in its name is the “CANTY MARL NELSON BR NZ MEAT IND RELATED TRADES IND UNION WORKERS WELFARE SOC INCORPORATED”. They have not filed annual accounts for 2003, 2005, 2007, 2009 and 2010. Their 2011 accounts only show income of $37,000 so they do not explain where the “missing” $4 million of revenue is.

If 80% of the money is kept in branches whose accounts are excluded from the incorporated society’s accounts, then that is seriously wrong. Branches are generally regarded as part of the parent body, unless themselves incorporated.

It will be fascinating to see if there is an innocent explanation for the missing $4 million or so.

Whale has blogged on this issue in recent days.

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38 Responses to “SFO complaint laid about Meatworkers Union”

  1. Nostalgia-NZ (5,119 comments) says:

    It will be equally fascinating if Affco are actually showing real concern for the workers they’ve locked out and who are certainly losing more than $5.95 per week even supposing there is anything provable behind the allegations. Could we expect that affco are actually well disposed toward their workers and don’t want to see them getting ripped off? If that’s true there’ll be no need for further transportation of pigs to the slaughter houses because they’ll fly there themselves. Either that, or someone is telling porkies and I bet it all ain’t just ‘tally-ho old chap.’

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  2. lyndon (325 comments) says:

    The respective press releases:
    Serious Fraud Office Asked To Investigate Union Finances
    Talley’s wasting public money on ‘publicity stunt’ complaint

    For the moment I’ll take “the same complaint was made by another individual to the New Zealand Institute of Chartered Accountants and Mr Eastlake was advised no action would be taken” as giving the benefit of the doubt.

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  3. dog_eat_dog (780 comments) says:

    The institute can generally only deal with institute matters, i.e. if accounts are being prepared by members of the institutes and there is something that breaches the COE, etc. If it’s some bloke who isn’t a member, then unless he’s claiming to be a Chartered Accountant, NZICA won’t have any action to take.

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  4. burt (8,238 comments) says:

    OMG the funding arm of the Labour party don’t declare all their income when they extract money from low paid workers to donate to highly paid politicians…. who would have guessed.

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  5. dime (9,856 comments) says:

    Imagine the uproar if this was the business round table and $4 was missing…

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  6. nasska (11,277 comments) says:

    The great socialist mystery is about to unfold. Where will the monies entrusted to the comrades be traced to?

    a) Organisers’ beach houses in Queensland
    b) Rent Boys
    c) Labour Party Electioneering expenses
    d) Madam Lash’s House of Pain
    e) All of the above.

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  7. Nostalgia-NZ (5,119 comments) says:

    dime
    7.15

    Ok then. What did happen to that $4?

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  8. toad (3,674 comments) says:

    Funny how this just happens to come up in the middle of an industrial dispute between AFFCO and the Meatworkers Union. Just like all the crap PoAL threw at MUNZ, this is a blatant PR exercise on AFFCO’s part.

    It is all part of their plan to be a lazy employer that makes productivity gains by reducing wages rather than focus on their own managerial and governance performance.

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  9. nasska (11,277 comments) says:

    toad

    I take it that it has never crossed your mind that if the comrades obeyed basic accounting laws & submitted audited accounts when due there may have been nothing to speculate about.

    Typical lefties….rules only apply to non unionists.

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  10. big bruv (13,725 comments) says:

    So alleged serious fraud is ok in your book Toad just as long as it is your side who are doing it?

    Typical Green hypocrisy.

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  11. questions (198 comments) says:

    Definition of a concern troll.

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  12. toad (3,674 comments) says:

    @big bruv 8:51 pm

    “Alleged” fraud is okay, because everyone is innocent until proven guilty. An allegation can be made maliciously or vindictively or mistakenly, and have no substance of criminality. And Paul Quinn is an upstanding citizen too, on that basis.

    I would just say let things take their course. “Convicted” fraud is not okay, and if anyone at the Meatworkers Union is convicted of fraud they deserve what they get.

    But it does seem strange that this allegation emerges in the middle of an industrial dispute, at the instigation of one of the parties to that dispute, and appears to be related to stuff that has been on public record at the Companies Office for some considerable time.

    Guess someone at AFFCO went digging for dirt to try to get one up in the PR stakes. Given the PoAL self-destructive result from using that same tactic, maybe AFFCO would be better to get back to the negotiating table and bargaining in good faith.

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  13. Other_Andy (2,612 comments) says:

    @toad

    “Guess someone at AFFCO went digging for dirt to try to get one up in the PR stakes.”

    You are probably correct there. However, lets not pretend the union is as white as driven snow. MUNZ went for threats of violence and intimidation and a legal ‘joust’ is at least, well legal.

    As for ‘good faith negotiating’, how does that work? The unionists give their demands and ‘the company’ just gives them all they want? As with the PoA dispute, ‘the company’ wants more flexibility which in short means that they only want to pay for hours worked, pay and other conditions stay the same.
    The unionists want to keep the status quo and want to be paid even if they don’t work. PoA or AFCO are not going to change their stand and neither are the unions (So it seems), so when will this dispute end? The judge is not going to decide who is right or wrong, he\she is only interested in the process.
    When negotiations are finished and no agrrement is reached who is going to get his way?
    Somebody has to and somehow I do not think it is the union.
    Both meat workers and wharfies have a good thing going. Well paid work and good conditions.
    What happens when the meatworks close (As many have in the past)?
    Ever been in Moerewa?
    Used to have meatworks that employed most of the town.
    Not much other work around, the same with the meatworks that are on strike right now.
    Meatworks closed and now it is a depressing place.
    Shops and houses boarded up, most people on the benefit.
    Will those striking meatworker cut of their nose to spite their face?

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  14. big bruv (13,725 comments) says:

    Toad

    So what you are saying (because that was a very weak reply to my question) is that corruption or fraud is fine just as long as the left are the ones committing the crimes.

    I guess that explains why the Greens did not do anything when one of their own staff (with the probable full knowledge of one of the co leaders) vandalised National party property.

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  15. Keeping Stock (10,299 comments) says:

    Quite so Big Bruv; Toad would doubtless like to forget the systematic attacks on National Party billboards by the partner of Russell Norman’s executive assistant and his cohorts. But it happened, and he cannot deny it, whilst condemning an employer who has quite rightly called into question the financial practices of a trade union.

    I have it on good authority that Toad has gone back to university this year. And one of the papers he’s taking is Hypocrisy 101.

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  16. Nostalgia-NZ (5,119 comments) says:

    How the hell we get from a pig-headed employer using dirty tactics, similar to those that failed for POAL, to attacks on party billboards is beyond me. And as for predictions of closing down the meat works, we’ve heard the before, ‘be good or we’ll take your jobs away’ – possible, but the reasons would be more strategic than a dispute over 2 or 3% wage increase and a collective contract. The argument really is the collective contract and nothing to do with accounting procedures which is none of the business of the Talley family anyway, next they’ll want to publicly scrutinise what workers spend their money on in an effort to say they have expensive tastes and should therefore be paid less.

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  17. mikenmild (11,247 comments) says:

    Good call Nostalgia. I don’t think anyone believes Talley is raising this in the interests of their employees.

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  18. Other_Andy (2,612 comments) says:

    “…..but the reasons would be more strategic than a dispute over 2 or 3% wage increase and a collective contract.”

    And the strategic reason would be…..?
    Cost.

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  19. Liberal Minded Kiwi (1,570 comments) says:

    Well well well, criminal organisations are behind the disruption of our biggest businesses from doing their day to day jobs?
    Gee what a surprise. The plan is quite routine for our trade unions; infiltrate businesses, start demanding compliance from the owners and threaten to derail them if their demands are not met.

    Cue whining unions crying that it’s “only a few extra dollars” to pay higher wages and then we find out that they are just using their members as pawns and are scamming their own members. These unions pay vast amounts to politicians to get what they want and when they are faced with the word no – all hell breaks loose.

    And you wonder why people distrust union leaders and some of the lowest events in our history are all a result of militant unions. If we were to bill the unions for the cost of their actions, they would soon learn their lessons.

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  20. flipper (3,985 comments) says:

    Hang on a minute….

    AFFCO says it pays all union fees into a single bank account. If true, the MWU has some serious questions to answer since their ACCOUNTs should, at the very least, show receipts “on behalf of” and disbursements “to” unincorporated “union branches”.

    What happened to the GST which is now chaarged at 15% (union fees attract GST) ?

    If the “branch unions” are unincorporated they probably have an income tax liability. If they claim they received only “donations” then the MWU has further explaining to do.

    And AFFCO accounts for just $500,000

    False accounting????????

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  21. Mark (496 comments) says:

    It seems strange that Unions do thier level best to have the most obscure accounting of thier member funds. If a business was following that same practice questions would be raised.

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  22. mikenmild (11,247 comments) says:

    It really is strange to see comments in the blogosphere pretending to care about the meat workers’ union fees. Why not just cut to the chase and say what you mean? If you don’t like the union and think it should somehow be stopped from representing its members, just say so. At this stage all we have is a vague allegation, taken immediately as proven by some.

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  23. Mark (1,480 comments) says:

    The word “Union” removes the rationality from much of the debate on this blog. In the Thesaurus of the right Union is a synonym for evil, bludger, corruptive influence.

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  24. david (2,556 comments) says:

    mild – have a look at the Sydney Morning Herald and read up about the HSU situation. That case has raised awareness about union malfeasance and has probably prompted a considerable degree of interest in seeing if similar things are happening here.

    Of one thing there is no doubt, when large sums of cash start sloshing around, you either have very, very tight control systems or you have some fraud. So far the jury is out and we will have to see but I think that the lack of any transparency is enough for questions to be asked because the best answers so far have come from “interested parties” (i.e. totally partial commenters) at the Standard and if you believe what Irish Bill, Mickey Savage, Eddie, et al say than I have a bridge at Cooper Pedy that I would love to sell you.

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  25. Kimble (4,434 comments) says:

    The word “Libertarian” removes the rationality from much of the debate on every lefty blog. In the Thesaurus of the Left, Libertarian is a synonym for evil, selfish, corruptive influence.

    The word “Conservative” removes the rationality from much of the debate on every lefty blog. In the Thesaurus of the Left, Conservative is a synonym for evil, bigoted, corruptive influence.

    The word “sceptic” removes the rationality from much of the debate on every lefty blog. In the Thesaurus of the Left, sceptic is a synonym for evil, stupid, corruptive influence.

    The word “capitalist” removes the rationality from much of the debate on every lefty blog. In the Thesaurus of the Left, capitalist is a synonym for evil, greedy, corruptive influence.

    The word “business” removes the rationality from much of the debate on every lefty blog. In the Thesaurus of the Left, business is a synonym for evil, exploitative, corruptive influence.

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  26. burt (8,238 comments) says:

    Kimble

    I think it’s simplier than that. In the left blog there is only one statement; It’s OK when Labour do it.

    These unions being affiliated to Labour (IE: Thier funding arm) gives them the right to act like Labour – Whatever it takes to hold power ….

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  27. burt (8,238 comments) says:

    mikenmild

    It really is strange to see comments in the blogosphere pretending to care about the meat workers’ union fees.

    There is something seriously wrong when money extracted from low paid workrs is donated to highly paid politicians so that highly paid politicians don’t need to dip into their own pockets to market themselves.

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  28. lyndon (325 comments) says:

    Okay, how about

    SFO not pursuing complaint against Meat Workers Union
    http://www.scoop.co.nz/stories/BU1204/S00376/sfo-not-pursuing-complaint-against-meat-workers-union.htm

    I can’t help noticing that did not take long.

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  29. Nostalgia-NZ (5,119 comments) says:

    lyndon
    12.54

    Taking into account such SFO investigations usually take some time it appears the SFO didn’t want to be seen as involved in what are now revealed as the dirty tactics of affco. So much for due process for all of those salivating at the prospect that Talley were the good guys, telling the ‘truth’ about the bad guys. It’s not quite tally-ho after all.

    Other Andy
    8.03

    The strategic reason was a little tongue in cheek because I thought they’d just brought affco. I could be wrong about that, if I’m not however Talley already knew the ‘costs’ through due diligence when they brought the business.

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  30. philu (13,393 comments) says:

    given they have been cleared of institutional-corruption allegations..

    ..will any commenters on this thread ..who had already declared them guilty…

    ..will they withdraw and apologise…?

    ..they are..after all..serious allegations..

    ..(should i start holding my breath in anticipation..?)

    phillip ure@whoar.co.nz

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  31. mikenmild (11,247 comments) says:

    I wonder if there will be anyone who still thinks there’s something suspicious about this union, you know, just because.

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  32. mikenmild (11,247 comments) says:

    I wonder why this thread has died off…

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  33. YesWeDid (1,048 comments) says:

    Hey guys the word you are looking for is spelt s-o-r-r-y.

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  34. burt (8,238 comments) says:

    YesWeDid

    Is that sorry for spending the workers hard earned cash by donating it to highly paid politicians so they can market themselves on the sweat of the workers rather than their own dime ?

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  35. Liberal Minded Kiwi (1,570 comments) says:

    Sorry that I ever employed a member of staff that was sympathetic to unions. I thought I only employed people who could think for themselves.

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  36. mikenmild (11,247 comments) says:

    Ever thought that people might join unions because it is in their best interests?

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  37. ross69 (3,652 comments) says:

    > will they withdraw and apologise…?

    Come on, Phil, that would mean that those throwing mud have a conscience. Do you really expect an apology from those with a pathological hatred of unions?

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  38. ross69 (3,652 comments) says:

    > Hey guys the word you are looking for is spelt s-o-r-r-y.

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