Union fees suffer from lack of disclosure

There’s a puzzling discrepancy in the annual accounts published by NZ Meat Workers and Related Trades Union Inc (NZMWU) because they apparently understate by a considerable margin the actual revenue and expenses of the different branches of the union, not to mention the balance sheet items held in each branch.

 

NZMWU is legally obliged to post its annual accounts by the end of April for the preceding 12 month period and these accounts must consolidate the annual balance sheets and profit and loss statements for theCanterbury, Otago/Southland, Wanganui and Aotearoa branches.

 

Until 2005 Aotearoa branch was separately registered as an incorporated society which reported annually to the Registrar of Incorporated Societies. In its last annual report before it disbanded and joined NZMWU as a branch of the main union, it reported total contributions of $1.26 million, expenses of $1.2 million and total assets of just under $1.2 million including term deposits of $961k.

 

In 2010, the most recent year for which accounts are available, NZMWU reported equivalent figures of $712k contributions or capitation fees, $656k expenses and total assets of $1.026 million. Aotearoa branch alone contributed capitation fees of $271.4k, although it is understood the membership pre-merger comprised more than just meat workers.

 

So on the face of it, reduced union membership and classification changes have resulted in a 78% reduction of Aotearoa’s contributions and yet there have been no significant changes in staff levels employed by the branch to carry out its responsibilities to its members. The alternative view suggests the bulk of branch income and expenditure is not being reported as legally required. The reported fee per member was $51 per year for 2009 and 2010 which appears substantially less than the meat company deductions paid to the branches and certainly lower than Aotearoa’s receipts in 2005.

 

The official legal position has been obtained from the Ministry of Economic Development which administers the annual reporting by incorporated societies to the Registrar in accordance with the 1908Incorporated Societies Act. The annual filing must be accompanied by a signed certificate which certifies the approval of the annual financial statement by members of the society at a general meeting. These statements do not have to be audited. However the members must have the opportunity to view and question them and may also elect not to approve the statements, if they are deficient or fail to disclose relevant information.

 

Where a society has unregistered branches as part of its structure, each branch must supply full financial details for inclusion in the statement submitted to the Registrar. This procedure must follow the rules of the society at all times. But it is in following this procedure where there seem to be serious gaps in NZMWU’s practice.

 

The financial reporting by NZMWU appears to breach the obligations of generally accepted accounting practice (GAAP) in spite of the signed auditor’s statement which states exactly the opposite for the most recent year’s accounts. Unless union membership of the Aotearoa branch has dropped by almost 80% in six years which seems most unlikely, particularly when there has been no equivalent reduction in overhead structure, there seems to be no other logical explanation.

 

Attempts to obtain an explanation from National Secretary Dave Eastlake andAucklandbased secretary of Aotearoa branch Graham Cooke have not achieved a formal response, while a phone call to the auditors,Christchurchbased Beck & Associates, encountered a point blank refusal to discuss the matter. To be fairEastlakephoned last week to say he was fully occupied on other union issues, such as the picket lines at CMP Marton, and couldn’t meet the deadline for this column. However he reiterated the previously stated view the union had received advice; it was satisfied it was meeting all its reporting obligations and was unwilling or unable to explain the apparent discrepancy between reported capitation fees and union member payments, as deducted from wages and paid by the meat companies to the local branch.

 

The major question is what is to be gained by concealing annual revenue in this way, whether intentionally or not. A possible conclusion is preservation of jobs and perks for the officials whose roles must be threatened by the increasing proportion of meat workers on individual employment agreements (IEA).

 

The situation at CMP illustrates how much the industrial relations landscape has changed since the introduction of the Employment Relations Act, enabling companies to negotiate both IEAs and collective agreements with their workforce. Less than 20 years ago it was still possible for the union to bring a company to a complete halt, holding a pistol to the company’s head until a deal had been negotiated. Today, as the situation at CMP Marton demonstrates, a combination of union and non-union labour means plants don’t have to close during industrial action. Workers on IEAs can keep working and earning money, while the unionised workforce is stuck outside on the picket lines.

 

Union officials will argue they are protecting workers’ jobs by insisting on preservation of terms and conditions. Realistically in a plant where half the workforce may be on IEAs and prepared to work under the terms of those agreements, it seems counterproductive to go out on strike. It is tempting to think officials may be looking after their own interests more than those of their members, when they encourage strike action, instead of being prepared to negotiate terms and conditions which suit the company’s desired cost base.

 

The main problem may be the age and history of today’s meat workers union leaders, many of whom have been in their positions since the 1980s. Unless the NZMWU rejuvenates its leaders and its methods of operation, such as transparency of financial reporting so members know how their contributions are being spent, the union may struggle to survive in the employment relations landscape of the 21st century.

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3 Responses to “Union fees suffer from lack of disclosure”

  1. Grace Says:

    When utilising random facts and figures to support your views with regard to “union funds transparency”. Note: The CMP workers have been LOCKED OUT and are NOT on strike. As a LOCKED OUT labourer I take exception to the fact that you feel that we should accept the scraps that CMP Rangitikei deems acceptable as there have been NO Negotiations merely corporate bullying and intimidation. If the 21st Century sees workers like those of us that are LOCKED OUT from CMP Rangitikei, as a means to allow those who have so much, gain even more at our expense, we see no alternative for us other than to publicly picket for what little we need to survive. We cannot stand by and watch people such as yourself point fingers and report only part of this story with little regard for the full facts. In future if you are to use random “situations” to glorify your opinions then please, by all means report ALL of the facts and not those achieved by yellow journalistic blather!

    • Allan Barber Says:

      I apologise for my mistake about the lock out. However I did not use random facts and figures for my article, but information that is publicly available, indeed the only type of information that the union is required to disclose. I understand your need to protect your terms of employment as best you can.

  2. Graham Cooke Says:

    Wow, Allan….what a load of “hogshit” as the American’s would say. I am so sorry to have missed your dealine Allan, I was in Omaha Nebraska (USA) learning the latest on the World Meat Industry and the latest on US Employer Union Busting tactics.
    I am sure you know about these tactics, as you and some of your old AFFCO 1980s workmates continue to stragegize and develop the demise of this union within AFFCO and South Pacific Meats. Jim Knox, Secretary of the Federation of Labour had a saying “company’s come and go, Union’s stay on for ever”, little has changed from my observation of our meat industry.
    AFFCO and CMP exhibit the Dictatorial Management structure rather than an inclusive and collaborative management structure.
    All our members at AFFCO are threatened with disciplinary hearings leading to dismissal if they put any notices of any nature onto Union notice boards at AFFCO plants, however, your unbalanced article Allan was put up on every AFFCO plant notice board by the local AFFCO management team.
    On an early phone conversation with Allan, he was able to tell me confidential Union financial information which can only have been supplied to him by AFFCO.
    Further, AFFCO has now decided not to accept NZMWU Branch ‘initiation of bargaining’ papers, they will only accept papers of initiation from National Office.
    Yes Allan, one of many mistake’s – How could you get locked out wrong its in all the newspapers?
    If you were a financial member of the NZ Meat Workers Union you would have access to our audited financial accounts.
    When was the last time you asked to see Talley’s, Affco’s and SPM’s financial accounts? or is that different, Allan?

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