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.