Another Rodney column

August 28th, 2012 at 7:14 am by David Farrar

Rodney is on fire at the moment. His NBR column on the Meatworker Union accounts is excellent:

 I was recently told about some serious spending by the New Zealand Meat Workers Union that surprised me. It was so surprising that I thought I should check it out. No problem. I would just look up their audited accounts that the Registrar of Incorporated Societies would hold. That way I could determine if the story I was told was true. I was shocked to learn the accounts aren’t there. The meatworkers have four branches and for the past seven years have only been disclosing the capitation fees paid by the four branches to the national body. For the year ended September 2010 the disclosed income was $712,370. The total income to the union is several million dollars a year. That’s a failure over the years to disclose tens of millions of dollars

Whale has blogged extensively on this in the past. The union thinks it can hide the income and expenditure of its branches by pretending they are not part of the incorporated society. But this is clearly wrong. The law states a union must be an incorporated society.

The law is clear. To be a union, an organisation must be incorporated. And incorporated societies must file annual financial statements that members of the public can inspect. The advantage of incorporation is that it gives a legal personality separate from the society’s members. In return, members of the public can inspect the society’s accounts. But I can’t for the Meat Workers Union. Neither can you. And that’s been the case for seven years.

Sadly, the authorities are not exactly holding the union to account

Parliament has provided the registrar with the power to require records. So I wrote to the registrar pointing out the meatworkers’ failure. I suggested he use his power to get the branch records for the last seven years and make them publicly available. That was back in May. The registrar is Neville Harris, deputy secretary of the Ministry of Economic Development, which is part of a new super ministry. He advised me that he had been aware of the meatworkers’ failure to disclose their accounts since November 2011.  My information was not news to him. He explained he had been in contact with the union and was following up with the objective of having it file a “revised financial statement” that includes information relating to the activities of its branches. I have had no explanation why he doesn’t just demand the branch records and why he is speaking of just one financial statement singular when there are several years missing. It’s a complete mystery to me why the registrar just doesn’t demand the branch records and made them publicly available. After all, that’s the law’s requirement of unions and incorporated societies. Mr Harris and I now have had quite a correspondence. I can report that I am no further ahead than when I started. This month he advised me that he has decided the way forward is to obtain an opinion from an external accounting expert and to endeavour to resolve this matter on the basis of that advice. I have no idea why the registrar is seeking that advice. The problem is not an accounting one. It’s a legal one. The simple requirement is that the Meat Workers Union and its branches are required to disclose to the public their income and their expenditure and they aren’t. The person in charge of making sure they do is Mr Harris. Parliament has granted him the power to ensure they do. He is refusing to use that power. Instead, he’s working with the union to get them to file and is seeking accounting advice. Heaven only knows why.

I agree it is simple. The Registrar states you have until x date to file corrected accounts and a failure to do so will result in deregistration. Companies get automatically degregistered for late annual returns, so why does a union get away with seven years of inadequate returns?

The Talleys dispute

May 13th, 2012 at 10:29 am by David Farrar

Jon Morgan at Stuff has a long feature on the Talleys and Affco dispute. One extract:

As Talley’s influence increased so did anti-union activity, according to Meatworkers organiser Roger Middlemass. “It was like a cold front arriving.”

He accuses Affco of a string of anti-union acts, including encouraging workers not to sign with the union and of banning the union from posting notices, including its financial statements, in plants.

“It is Dickensian,” he says. “This is not even last century stuff, it’s the century before.”

One example, he says, is the inclusion in the disputed contract of a clause that talks of making union members redundant on the grounds of irreconcilable differences between them and the employer, or them and other workers, or when “the interests of the employer would be best served by terminating the union member’s employment, not withstanding that the union member has not been guilty of any conduct or omission that would justify dismissal on the grounds of misconduct or poor performance”.

“It means that the employer can just say it’s in my interest that you don’t work for me any more. And you can’t take it to court because you’ve not been dismissed, you’ve been made redundant,” Middlemass says. “The word draconian isn’t strong enough to describe this.”

Affco operations manager Rowan Ogg says this clause is “reasonably standard” and that he has it in his employment contract.

Assuming it has been correctly reported, then I have to say the union has a very reasonable case here.  An irreconciliable differences clause is not reasonably standard. The only place I knew which has them is Parliament, because it is impossible for an MPs office to function if the MP doesn’t have total trust in their staffer/s. But this clause probably wouldn’t even stand up in court, which is why there is always a payout of three or more months with it, if triggered. And often, another job found for the staffer with another MP.

That clause basically does ask meat workers to surrender their employment rights, and allow AFFCO to fire them for no substantive reason. Now I’m in favour of trial periods where you can do that as it is always a risk how a new employee works out. But I would not sign a contract like that if I worked at AFFCO.

If reported correctly, the clause also seems confused. Positions are made redundant, not people. You can not have a clause saying you are made redundant if we decide we do not like you.

I am no fan of the tactics of the Meatworkers Union. But that does not mean that they are wrong in refusing to sign the proposed contract. I would not sign a contract like that if I was a meat worker.


More problems for Australian Labor

May 3rd, 2012 at 10:00 am by David Farrar reports:

THE union boss Michael Williamson has allegedly been caught attempting to take a bag of documents out of the HSU while a police raid occurs on the premises.

Detectives from Strike Force Carnarvon moved in this morning to raid the premises as part of their investigation into alleged corruption in the Health Services Union.

The head of the fraud squad, Detective Superintendent Colin Dyson, confirmed police were considering charging someone with attempting to hinder the investigation by removing information.

The Daily Telegraph reported that the person is Mr Williamson. The documents he attempted to remove were seized by police. Mr Williamson is also a former National President of the Australian Labor Party.

The Australian Labor Party is near terminal. Gillard’s tenure could well now be weeks, not months. The delay is working out who to replace who with.

Meanwhile back in NZ, Whale reports:

As regular readers will know I have been focusing on dodgy unions and their lackadaisical financial records.

One union which I highlighted was the Meatworkers and Related Trades Union in which I found over $4 million of members funds missing.

As a result of my investigations one of the meat companies laid a complaint with the Serious Fraud Officewho declined to investigate. Perhaps they should have not been so hasty in dismissing the complaint. Perhaps Helen Kelly might like to apologise to AFFCO after labeling their complaint as “hatred”.

I have learned yesterday that the Meatworkers and Related Trades Union has been ordered by The Registrar of Incorporated Societies to comply with the law and has required the Union to re-do their latest financial statement to include the figures for the unincorporated branches.

This means that the union claims that it was all above board for them to not issue consolidated accounts and essentially hide members monies in subsidiaries was based on poor advice and they are now being required to properly file audited accounts.

If this is correct, I am glad the Registrar has ordered compliance. Incorporated Societies are obliged to have their accounts in the public domain, and unions are not exempt from that – even ones affiliated to the NZ Labour Party.

The Meat Workers Union accounts

April 13th, 2012 at 1:00 pm by David Farrar

Stuff 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.

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. Unions are required to be publicly registered. Do those who pay the unions fees think they are joining the NZ Meat Workers Union 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.

Both employer and union to blame

December 17th, 2010 at 10:43 am by David Farrar

Anna Leask at the Herald reported:

Staff at a North Island freezing works had their pay cut for the official two-minute silence to remember the 29 miners killed in the Pike River mine.

My reaction upon reading this first paragraph was to do a post lashing out at the employer as a bad employer who should be ashamed of themselves. Bad employers piss me off, because they make life hard for all the other employers.

But upon reading the full story, it is more nuanced. The employer is not without blame, but neitehr is the union. In fact the poor employees are the victims in a struggle between the two.

Staff at the Silver Fern Farms Te Aroha plant lost two cattle each from their daily quota – the equivalent of between 98c and $1.60 for each worker – after downing tools.

Staff are paid for each beast they process, and have a daily quota of 280 cattle.

It takes about 63 seconds to skin, gut and bone an animal.

Depending on their experience, workers are paid between 49c and 80c for each beast processed.

So my thought was why not just pay them for the two extra beasts, or alternatively just carry on working until 5.02 pm.

Silver Fern Farms chief executive Keith Cooper said all workers were encouraged to observe the two-minute silence.

He said the local branch of the Meat Workers Union approached Silver Fern Farms in support of observing the memorial silence.

“As the meat workers are remunerated on the basis of throughput, Silver Fern Farms offered the union the opportunity for workers to process the missed two animals at the end of day as overtime.

“However the union declined the offer as a gesture of solidarity with Silver Fern Farms as an employer and in the spirit of comradeship with the West Coast workers.”

So the union refused to allow the workers to gain the money back.

When asked why Silver Fern Farms didn’t just pay the workers for the two cattle, a spokeswoman for Mr Cooper said it “just wasn’t an issue at the time”.

Well, it was still a dumb call. Yes you may be peeved at the union for refusing permission to work until 5.02 pm, but why not be a good employer and not punish the staff for doing the very decent thing of observing two minutes silence.

Union president Mike Nahu said the local union representative declined the overtime offer because the union did not want their tribute to the miners to be based on money.

He said workers had a clause in their contract saying they could have extra time at the end of a shift to process any remaining beasts.

“We chose not to make up the loss. It wasn’t about the money, it was about respect. They could have very well made it up, but that wasn’t the issue.”

He could not say if the local union representative explained the decision to all workers before the stoppage.

He said no one had approached the union to complain, but accepted some workers might not be happy with the decision to forgo the remaining beasts.

Basically both the union and the employer have crapped on the workers.  They have both put their desire not to give in to the other over doing the right thing.

However at the end of the day, Silver Fern should have done the right thing and paid them for two extra beasts. If I was on the board of Silver Fern, I’d want to know who made that decision, and hold them accountable for it.