State nails errant unions

If a union is deregistered it is rendered impotent because employers can ignore it. (Delwyn Verasamy, M&G)

If a union is deregistered it is rendered impotent because employers can ignore it. (Delwyn Verasamy, M&G)

The department of labour was acting too zealously, said trade union federation Cosatu after the deregistration this month of two unions affiliated to it and a report that other unions are in danger of being deregistered.

According to labour experts, until the deregistration of  the Communication Workers' Union (CWU) and the South African Democratic Nurses' Union (SADNU), Cosatu had been relatively immune from what is a fairly common practice.

Deregistration is potentially fatal for a union because it means it can no longer compel employers to deduct union dues from wages, nor can it represent its members in Commission for Conciliation, Mediation  and Arbitration cases. Employers can ignore a deregistered union and it loses its bargaining power, said labour consultant Gary Watkins of Workinfo.

The department of labour said registration was cancelled for 20 unions in 2010, 16 in 2011 and 13 in 2012 to date, so there was a declining trend. But most of these were smaller unions that were not affiliated to the major federations.

In the deregistration process, there is usually considerable initial contact between the registrar and the organisation.
The registrar must publish a notice in the Government Gazette at least 60 days before deregistration to allow for final written representations.

In 2012, besides the deregistration of the CWU and Sadnu, the registrar issued notices of intention to cancel registration for seven trade unions and one employers' organisation. None of the seven unions represents more than 2500 workers.

The CWU, which claims to have 44000 members, responded immediately with an urgent application to the Labour Court to give it time to address problems.

An agreement between the CWU and the department allowed a postponement until September 20.

According to a report in the Sowetan, the CWU was deregistered because it had not submitted audited accounts since 2006.

The secretary general of the CWU, Gallant Roberts, told journalists that there were a few "minor issues" to resolve, which should be sorted out before the September deadline.

The Sowetan report said only two of Cosatu's 21 affiliate unions – the National Union of Mineworkers and Sasbo (the finance union) – had fully complied with labour law and it suggested that most of the others were facing deregistration. Cosatu claims to have a membership of about two million.

National Union of Metalworkers of South Africa (Numsa) general secretary Irvin Jim, who was quick to repudiate the Sowetan report, said that Numsa (which the Sowetan said was also facing deregistration) had only "minor queries" to resolve with the department of labour.

A statement from Numsa said: "We are keen to establish why this story is popping up at this point ... ahead of the Cosatu national congress to be convened in September."

Numsa said that "an opportunist" had forwarded the Sowetan an email written to Cosatu from the department that advised which unions in the federation had not met its requirements. It was, according to the union, a "desperate agenda to discredit Numsa and the Cosatu leadership" and the Sowetan had "sensationalised the matter".

Late financial statements
The department of labour said that, besides the CWU and Sadnu, two other Cosatu affiliates' audited financial statements had not been submitted for 2009 and nine other affiliates' statements were outstanding for 2010.

"This does not mean that they are about to be deregistered," said the department. "The registrar of labour relations has considerable discretion in deciding when to publish a notice of intention to cancel the registration of a trade union. Generally, a trade union may be up to two years behind in the submission of its financial reports. If no satisfactory explanations are forthcoming [and] an organisation persists in not complying despite the department's efforts, steps will be taken to begin the process of cancellation of its registration."

Although labour consultant Tony Healy said the department of labour had had a "healthy appetite for deregistration" for some time, other observers believe the department is telling unions to get in line with the law.

The huge losses suffered by clothing worker provident funds have emphasised the dangers of allowing too much slack in auditing requirements – although the department of labour points out that stricter application of the legal requirements relating to trade unions would not necessarily have avoided these abuses, because provident funds are governed by separate boards of trustees in terms of the Pensions Fund Act.

Unions receive membership fees from their workers, which Watkins estimated at an average of R30 to R35 per member per month. This means that Cosatu unions receive R60-million to R70-million a month in dues. But Watkins said that payments for pension and provident funds, funeral schemes and many other offerings far exceed membership fees and that unions were "big business".

The department of labour said that its only recent change in approach had been in relation to trade union federations. It said it has started a process of interacting with them to make them aware of the state of compliance with their affiliates, and it has begun discussions with them about improving the situation.

Watkins said the larger Cosatu unions, such as Numsa, were generally well run and he would be surprised if they were in any real danger of deregistration.

He added that there had been a policy of tightening up on compliance in the department of labour and it was much more effective following the appointment of new director general Nkosinathi Nhleko.

Nhleko, who replaced Jimmy Manyi in mid-2011, emphasises rhetoric less and application of the law more, said Watkins.

Bargaining councils
Another indication that the department of labour is tightening up on compliance is its refusal this year to grant a certificate of representativity to a major bargaining council, the National Bargaining Council for the Clothing Industry.

Without a certificate of representativity, the minister of labour is unlikely to extend any agreement reached in a bargaining council to non-parties. Extension of agreements to non-parties is at the heart of the bargaining council system.

As with union deregistration, the department has considerable discretion. In terms of section 32(5) of the Labour Relations Act, the minister of labour may extend a bargaining council agreement to non-parties even if the bargaining council does not have a certificate of representativity on the basis of "sufficient representativeness".

However, such extensions would be more open to legal challenge than extensions in which there is a certificate.

The department of labour says that in the third quarter of 2011, close to 2.3-million employees  were covered by bargaining council agreements, or about 30% of South Africa's formal sector labour force – but more than one million of them were covered by public sector agreements.

Department of labour figures show that there has been no trend to increase the refusal of certificates of representativity in recent years, and that such refusals are relatively rare.

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