The Meat Workers Union accounts
April 13th, 2012 at 1:00 pm by David FarrarStuff reports:
The Serious Fraud Office (SFO) has declined to investigate a complaint made yesterday by Affco about the finances of the Meat Workers Union.
SFO chief executive Adam Feeley said an immediate evaluation of the information provided to SFO investigators failed to disclose any evidence of fraud.
“We encourage any member of the public to contact us where they have any reasonable grounds to believe that a serious financial crime may be taking place. However, it is equally important that the resources of law enforcement agencies are not unnecessarily drawn into matters where other, more appropriate, courses of action are available.”
Mr Feeley added that any issues regarding regulatory compliance were matters for the Registrar of Incorporated Societies to consider.
I agree it is not a SFO issue. But it could well be an issue for other authorities.
The union has confirmed that the vast majority of their funds are held in their unincorporated branches, whom they do not publicly publish accounts for. They claim their members belong to the branches, not to the main union.
However this is legally not possible. The union as a whole is the registered union, not the branches. Also the collective agreement with Affco is with the NZ Meat Workers Union, not any branch unions. And finally the union membership fees are paid into a bank account in the name of the NZ Meat Workers Union.
Unions have huge special rights and powers under the law. To gain these powers they must be registered under the Employment Relations Act 2000. S14(1)(b) states a union must be an incorporated society. These branches are either part of the main union (in which case their accounts should form part of their published accounts) or they are not part of the main union, in which case as unincorporated societies they are not unions, and can not receive union dues.
By requiring the union to be an incorporated society, the law also requires them to make publicly available their accounts. Most unions do this responsibly. The Meatworkers Union is not. They are refusing to make publicly available their overall income, expenditure and assets.
You can’t claim that the branches are what union members belong to, and use that to hide all your income.
The normal practice with an incorporated society is your accounts show details for both the parent (in this case the NZ union) and the group (the NZ union and the branches combined). I know this first hand as when I did the accounts for Red Cross in the early 1990s, one of my jobs was to consolidate around 33 branch accounts into the group accounts.
The MWU is obviously refusing to publish group accounts, because they wish to hide their finances. That is incompatible with being a registered union and an incorporated society.
Related posts:
- SFO complaint laid about Meatworkers Union
- Unions accounts
- Another Rodney column
- Workers protest against union
April 13th, 2012 at 1:13 pm
Let’s bullet point this post (you never know, Paula Bennett might be reading).
• First ham-fisted managerial smear failed spectacularly.
• No problem, have another go.
Vote:April 13th, 2012 at 1:15 pm
So who is making a complaint to the police so “crusher” can deal with it or to the register of whatever so the Attorney General can strut his stuff.?
Time it was done but!
Vote:April 13th, 2012 at 1:16 pm
You watch the media spin this as if: “since the FMA has said they don’t want to investigate, there is therefore nothing whatsover to see here, at all, in any way.”
The ironic thing being of course that this spin will be coming from the very organisations whose job it is to nothing all day but investigate stories exactly like this one.
But of course that irony will be completely lost on the news anchors and editors who do this.
Let’s see. This will be: Mary Wilson on RadioLeftWig Checkpoint, the anchors on Prime, TVNZ and TV3 and all of the disk jockey dicks who bother to cover it in their 30-sec slots at the top of the hour.
Vote:April 13th, 2012 at 1:19 pm
Hey, maybe the Union paid the H Fee!
Vote:April 13th, 2012 at 1:20 pm
Remind us again: Is Winston permitted to stand for NZ First?
Vote:April 13th, 2012 at 1:20 pm
I think that telling the unions that are not allowed to be lying cheating self serving extensions of the Labour party will be the end of them.
Vote:April 13th, 2012 at 1:21 pm
ross69
I think Winston’s past association with Labour has earned him a “do anything you like” pass as enjoyed for 9 years by Clarkenstien
Vote:April 13th, 2012 at 1:22 pm
On the basis that what DPF has said is correct, seems that the MWU has made a mistake about what its legal obligations are. MWU should rectify this mistake. Would need to question MWU’s motives if it declined to rectify.
Vote:April 13th, 2012 at 1:27 pm
The issues that DPF raises here were shouted down among a stream of abuse and vitriol when raised (very reasonably and politely IMVHO) over at The Standard yesterday. Judging by the crowing and dancing around the bonfire chanting weird incantations that has been going on since the SFO made their statement, the general opinion is that there ihas been a great victory against the forces of darkness and vindication of the structures created by the hyper-intelligent leadership of the union movement.
However, during the “discussion”, there was much dancing around the point and a total failure to back up claims that branches were exempt reporting requirements and were independent in spite of the common bank account evidence. Even the great Mickey Savage was missing in action over points of fact or law.
All this indicates that the players turned to Page 2 of the Socialist playbook which has the words “Lie, Denigrate, Obfuscate, accuse the other guy of your own worst failings” writ in large letters and repeated multiple times on the facing page.
The simple conclusion can only be that there is a high degree of discomfort over a light being shone on a very sensitive subject so I hope that the Registrar of Incorporated Societies, IRD, the Charities Commission and anyone else with a regulatory axe to grind start sharpening their cutting edges.
Vote:April 13th, 2012 at 1:33 pm
Whatever the situation is we know that serious fraud isn’t involved despite the Talley’s twice claiming that it was. Perhaps affco could end the ‘lockout’ at one of the plants and invite the workers to produce finely minced quality product for a new retail item: ‘Talley’s Pork Pies.’
Vote:April 13th, 2012 at 1:39 pm
We know no such thing Nostalgia-NZ. All we know is that the SFO have backed away from being seen to be involved in an industrial dispute.
Vote:April 13th, 2012 at 1:40 pm
Given that the union itself has confirmed the money goes to the unicorporated branches, then Talleys is no longer legally obliged to negotiate a collective agreement with the union, as they (the union) no longer meet the legal test to be a union that an employer needs to work with.
Perhaps this was AFFCO’s plan all along, to get the union themselves to say they don’t meet the legal test, and now AFFCO can legally negotiate with another ‘inhouse’ union, or go straight to IEA’s, unless the union fixes its accounts to the proper legal standing asap.
Vote:April 13th, 2012 at 1:49 pm
“All we know is that the SFO have backed away from being seen to be involved in an industrial dispute.”
I don’t think we even know that much. We do know that SFO saw no evidence of serious fraud on the face of the information provided and there was insufficient prima facie material to justify an investigation. We also know that there are apparent irregularities involving regulatory non-compliance. Beyond that is little more than wholly subjective, prejudice based supposition.
Vote:April 13th, 2012 at 1:54 pm
Fair comment Nookin, but I’ll warrant that Freely took one look at this and decided to get out of Dodge quicksmart before he set a precedent of being used as a cudgel to bludgeon and distract opponents during a dispute.
Vote:April 13th, 2012 at 1:59 pm
Its not a good look for the union, members arent able to find out what thier union dues are being spent on and whether they get good value for money.
Vote:April 13th, 2012 at 2:05 pm
@david
Vote:Good point david.
Good decission from the SFO if this is the case.
The SFO should not be used by either the union or the company to score points.
The question is, will they be back and have another look when the dispute is over?
April 13th, 2012 at 2:08 pm
Given the SFO’s record I don’t think you can safely conclude anything from any decision they make.
Vote:April 13th, 2012 at 2:12 pm
Other_Andy
Vote:There is nothing to prevent the Registrar of Incorporated Societies referring regulatory discrepancies but the real disinfectant would be if the accounts are properly presented and show things that are either contrary to the Union’s Constitution (in which case the auditor would be obliged to draw attention to them) or just excessive in which case the members might find their voices.
If they are clever enough in their accounting and amounts are not material in the overall scope of operations little will be revealed.
April 13th, 2012 at 2:34 pm
DPF, taking a look at the Meatworkers Union’s Rules (Incorporated Society 508904, for those who want to look it up and fact check me), the structure appears to be this:
Rules 22-28 permit the Union to establish Branches. In particular, Rule 22 permits the Branches to exercise such powers and funtions as authorised by the Union itself. Rule 28 requires the accounts of each Branch to be audited by a member of the NZ Society of Chartered Accountants.
Rule 6(a)(i) requires that an annual capitation fee be forwarded by each Branch to the Union itself. It specifically states that the capitation fee and any assets generated therefrom, shall be the property of the Union.
Rule 6(a)(ii) requires each branch to set an annual subscription, and specifies that the annual subscription, excluding the capitation fee that is the property of the Union, shall be the property of the Branch.
Rule 6(b) provides that the Executive of each Branch determines the amount of the subscription payable to the Branch by members in that Branch.
So in lodging a set of accounts that include as its income only the capitation fee paid to the Union, rather than the annual subscription paid by members to the branches, with the Registrar of Incorporated Societies, the Union is doing exactly what its Rules (that have been approved by the Registrar of Incorporated Societies) require.
So nothing dodgy going on at all – they are complying with the letter of their registered Rules.
[DPF: Actually those rules confirm they are breaking the law. The rules of an incorporated society can only affect the incorporated society and its members. The rules clearly state the union establishes the branches, hence the branches are part of the union.
The union accounts should include the branches, as the they are part of the union - not independent from it. ]
Vote:April 13th, 2012 at 2:44 pm
oh well thats ok then, as long as they follow the rules that they set for themselves its clearly perfectly ok. of course they actually have to follow statutory rules under the employment relations act (i notice you left that out) but for the left its clearly not as important as following your own rules (which you can always retrospectively change, isnt that right labour and the greens?).
one day toad will actually criticise something the left does rather than support them without question, always and vociferously, and the internet will break. course he will then be subject to mandatory reeducation in the uraweras by his comrades but it will be an impressive day anyway.
Vote:April 13th, 2012 at 2:44 pm
Toad, and which Rule exempts the branches from registering with the Registrar of Incorporated Societies and filing annual accounts?
Vote:April 13th, 2012 at 2:48 pm
This is quite a funny saga really. We have gone from allegations of missing millions to scrappnig over a possible few breaches of the Incorporated Societs Act. Woo hoo.!
Vote:April 13th, 2012 at 2:51 pm
@Grendel 2:44 pm
Yes, they are their own Rules, but the fact that the Registrar of Incorporated Societies accepted them means they are legitimate lawful rules under the Incorporated Societies Act. As for s. 14(1)(b) of the Employment Relations Act, the union is registered as an incorporated society, and its branches are establised under its registered Rules, so it is compliant with that too.
Vote:April 13th, 2012 at 2:54 pm
Mikenmild – we should not trivialise the commission of serious criminal offences here. Under section 23 of the Incorporated Societies Act, the penalty for failing to file returns can be as high as 10 cents per day in the most egregious cases.
Vote:April 13th, 2012 at 3:07 pm
@Mark. I’m fairly certain in the press release from the Union in response to the SFO complaint, they stated that the audited accounts from the local branch were available to any member on request, and were also on the noticeboard of all union workplaces, except for the Talley’s site’s which wouldn’t allow them to be displayed there.
Apologies if I am to be corrected, as I can’t find the release on Scoop, where I thought I had read it.
Vote:April 13th, 2012 at 3:08 pm
Toad, accounts record the flow of money. AFFCO has said they pay all the union dues they collect to one single Meatworkers account…there should be an accounting of that in the accounts….similarly branches should be consolidated int he accounts irrespective of the rules because the rules cover organizational arrangement but not the flow of monies.
The fact that they do not consolidate suggests that the branches are in fact unions in their own right, except that they aren’t registered as such, in fact the Meatworkers went through the process of de-registering the braches as incorporated societies…
If you look at the EPMU accounts, such as they are (missing two years of accounts still) they clearly show the branches in consolidation.
The Meatworkers Union is breaking the law.
Vote:April 13th, 2012 at 3:41 pm
And I’m sure that the Registrar of Incorporated Societies will crack down on this egregious offending with the full force of the authority vested in that office.
Vote:April 13th, 2012 at 3:49 pm
So is the lockout because the union are, as it now remains, not involved in serious fraud – the allegation of Talleys, or because ‘sweeter than light,’ and ‘holier than thou’ Talleys now claim there are discrepancies in the relationship of the paper trail between the branches of the union?
It’s a big call trying to crawl away from allegations of major fraud, to apparent claims of discrepancies in paperwork when men are locked out from work, particularly when it is those depriving the workers and their families with methods that don’t comprise any goodwill or fair mindedness making the claims. Excuse the obvious but affco don’t give a damn about legalities or fairness and that is why they dress up an attack against the union as being in workers interest and not, as it is, in the interests of affco.
Vote:April 13th, 2012 at 4:07 pm
@ Toad; is that like the Green Party campaigning on the basis that they MIGHT be able to cut a deal with National, when they had no intention ever of doing so?
How’s that Hypocrisy 101 paper going?
Vote:April 13th, 2012 at 4:25 pm
Of course the Talleys are playing hard ball. No news there. But that doesn’t change the question here.
Who is the actual registered union? Sounds like it’s the national union.
If so, do they have any members that work for AFFCO? If not, then who should AFFCO actually be negotiating with? Each individual branch? Are those branches registered unions?
I reckon that AFFCO can quite happily make hay out of this. Doesn’t mean that I think that’s a useful industrial tactic, but then again, I don’t agree with what the unions get up to either. Based on past behaviour, I’d fully expect AFFCO to take advantage of the large loophole this union appear to have left.
Vote:April 13th, 2012 at 8:08 pm
Do Talley’s have registered accounts?
As I can’t see any
Vote:http://www.business.govt.nz/companies/app/ui/pages/companies/168346/documents
April 13th, 2012 at 9:16 pm
@ Inky_the_Red
What you’ve missed is the shareholdings (it’s one tab to the left); see that all the owners live in NZ (and I’m guessing are NZ residents).
This means Talley’s does not need to register its financial statements.
See here: http://www.legislation.govt.nz/act/public/1993/0106/latest/DLM324962.html
Obfuscate less please.
Vote:April 13th, 2012 at 9:30 pm
I know the law, however is it fair?
Vote:April 13th, 2012 at 11:10 pm
If Talleys had special privileges at law, then perhaps that would be inappropriate. Unions have a special position in legislation, it’s appropriate that they need some public visibility.
Vote:April 13th, 2012 at 11:50 pm
Is it fair? … Yes, (as per PaulL’s post).
Not all legal entities are the same. The rules for different entities aren’t all the same. This is right; this is proper.
By your logic individuals should also be required to publicly register financial statements showing their financial affairs.
You first.
Vote:April 14th, 2012 at 10:34 am
If Talleys had special privileges at law, then perhaps that would be inappropriate. Unions have a special position in legislation, it’s appropriate that they need some public visibility.
Perhaps you missed the field known as “company law” – it’s quite a sizable field, and relates to companies’ special position in legislation.
This post is very poor propaganda. The successful smear was publishing Talleys’ complaint to the SFO office. There was no substance to it, but the mere publication of the complaint connects “Meatworkers Union” with “fraud” and “SFO investigation” in the reader’s mind. To later publish the fact that the SFO immediately noticed it was a baseless complaint being made for propaganda purposes just weakens the propaganda effect. Overall, could do better.
Vote:April 14th, 2012 at 11:57 am
Psycho Milt
Right… so the Meatworkers union are only guilty of trying to help people… yes we understand…. They donate to Labour so they simply can’t have done anything wrong!
Vote:April 14th, 2012 at 12:06 pm
Well, it coesn’t seem like there is anything much wrong with that the union has done. Just wanting them to be guilty of something doesn’t make it so.
Vote:April 14th, 2012 at 12:16 pm
mikenmild: the bit where they have members of a body that claims to be a union that isn’t a registered union? That isn’t wrong?
Vote:April 14th, 2012 at 12:20 pm
Yeah, that’s pretty serious I have to admit.
Vote:April 14th, 2012 at 10:43 pm
OK so the SFO have dropped this – what next ‘burt v meatworkers’ ? To be delayed and delayed till we get a Labour govt that passes retrospective validations for their funding arm ?
Vote:April 15th, 2012 at 10:44 pm
The whinge to the SFO fell felt on it’s face. Talleys are greedy whiny gurly mein. Far too aggressive for the august company of the business knights of the round table, unless you Sir Dougal of the Magic Money Roundabout
Vote:April 16th, 2012 at 1:00 am
AFFCO played silly buggers in a hamfisted attempt to use the Serious Fraud Office to score some cheap industrial points. In polite language the SFO told them to fuck off.
If the Meatworkers’ Union is breaking the law and/or its rules then that is matter for the union members and relevant authorities. It is no business of AFFCO or the SFO.
Vote:April 17th, 2012 at 1:07 pm
Next up
David Parker and the Company Minute affair
Vote: