Staff claim the Forum for Public Dialogue knew it was in trouble but did not tell them it couldn't pay salaries.
The apparently cash-strapped Forum for Public Dialogue (FPD) headed by political analyst Moeletsi Mbeki has moved to retrench its employees, who have in turn taken the organisation to court.
They all recently received letters informing them of "possible retrenchment" and saying "cash-flow challenges facing the employer" were behind the move.
"The financial situation necessitates various cost-saving exercises that may include possible staff reduction," the letters read.
"As a non-profit organisation, the employer was always dependent on ongoing funding and that was the reason why the prospect of retrenchment is specifically reserved in your contract of employment."
This week three of the employees took the matter to the Labour Court in Johannesburg, to compel the payment of February salaries. Their lawyer, Chris Mamathuntsha, said they now intend further action to recover payment for the remainder of their fixed-term contracts.
More broadly, the workers are also fighting the retrenchments, specifically the process the FPD followed, which includes an attempt to take a "short cut" in labour law stipulations, according to an employee.
The FPD allegedly demanded laptops and office keys from workers immediately after they had signed an acknowledgement of receipt of the letter, a move the employees said appeared to show that the organisation had already taken a decision to retrench them and was just issuing the letters as a formality.
The Mail & Guardian previously published details of a spat between Mbeki and the former chief executive of the FPD, Prince Mashele, in which Mashele accused Mbeki of helping to delay the publication of a survey of Cosatu shop stewards. Mashele resigned from the FPD in January.
Mbeki subsequently said he would sue the newspaper for the articles. His lawyers also informed the M&G in writing that he was no longer willing to respond to questions about any other article.
"Our client will therefore not be subjected to further scrutiny, pending the finalisation of the action instituted," a letter from Gideon van den Berg Inc reads. Mbeki did not respond when contacted for comment this week.
Meanwhile, it has emerged that the main funder of the FDP pulled out because of the spat between Mashele and Mbeki. A source said the donor withdrew "mainly because of issues of governance, particularly [regarding] the Cosatu [shop stewards] study".
FPD sources told the M&G that the not-for-profit organisation had been aware of its financial problems since November. Records of a November 21 board meeting, which the M&G has seen, show that Mashele briefed the board about the FPD's rapidly emptying coffers.
"I'm concerned about the state of finance; it's not looking good," Mashele told the board.
At the meeting, the company was not even sure it would have enough money to pay December salaries. Mashele at that time described the situation as "a crisis". "We don't have money to pay salaries for December. We need to raise something urgently in order to meet our commitments in December," he said.
The FPD had been living a hand-to-mouth existence for months, according to the meeting records.
One board member who attended the November meeting warned his colleagues that the FPD would be "trading recklessly" if it allowed employees to continue working while knowing there was no money to pay their salaries.
"We could get into legal trouble if an employee turns around and decides to sue because we didn't pay him in December, when we knew that we couldn't pay him and we had him working. We are exposed," the board member said.
The FPD's letters to employees say it found no alternatives to possible retrenchments. "The employer has been unable to find an alternative to avoid possible retrenchment due to the fact that we have a cash-flow challenge that can only be overcome with additional donations being secured.
"Some positions may become redundant for the foreseeable future but, since the employer may not be able to carry other existing administrative and support positions, all employees may be affected," the letters read.
FPD employees are likely to lose their jobs as early as the end of February, according to the letter.
All of them are on two-year fixed-term contracts that expire at the end of this year. – Additional reporting by Phillip de Wet