Johannesburg - Chemical and paper union Ceppwawu has been let off the hook by the Labour Department for its dodgy financial administration and failing to meet its lawful obligations.
According to sources in the union, the deputy registrar of the department has reversed a decision by his boss, Johan Crouse, who has been suspended by Labour Minister Mildred Oliphant, to place the union under administration.
Crouse was removed from his post and accused of gross insubordination when he attempted to place the Chemical, Energy, Paper, Printing, Wood and Allied Workers Union under administration.
But the Labour Court ruled nearly a year ago that Oliphant, who has been accused of being aligned to a certain faction in the union, had failed to apply her mind in a “fair and objective manner” when she removed Crouse.
Judgment was reserved on Monday in Oliphan'ts appeal of the ruling in the Labour Appeal Court.
Crouse had decided to take action against the union, and was given permission by the Labour Court to do so, due to it not submitting audited financial statements to the department as legally required. It has also not held constitutional meetings such as its national elective congress which was meant to happen in 2014.
Oliphant’s legal counsel was lambasted by a full bench of judges at the Labour Appeals Court in Joburg
The Appeal Court wanted to know why the minister believed she had the legal right to remove Crouse.
“The man was in the job for 20 years, so before he took the decision he must have taken into consideration the minister’s concerns,” said the judges.
They also asked why the minister did not question any of Crouse’s decisions to place other unions under administration but took issue when Ceppwawu was involved.
The court went a step further, expressing concern over what they described as “political interference” by Oliphant.
Ceppwawu, a Cosatu affiliate, has been rent down the middle for years, in a fight fuelled by its general secretary, Simon Mofokeng, and his allies’ attempts to grab direct control of the union’s R6 billion investment fund.
Disgruntled senior union members, who did not want to be named for fear of victimisation, told Independent Media that the decision on the administration should not have been made because the union remained in disarray.
Crouse decided to place the union under administration because it had failed to produce its financial statements from 2010 to 2013. According to court papers, in January Mofokeng and Ceppwawu president Thamsanqa Mhlongo attempted to seize power following a national executive committee (NEC) meeting by fraudulently creating a number of fictitious resolutions. These resolutions purportedly approved the draft audit statements and suspended NEC members from the opposing faction.
However, the high court later ruled that these resolutions could not be implemented and NEC meetings could not take place as those who were suspended would be prejudiced because they were barred from attending.
But it is understood that these financial statements have now been handed over to the Labour Department despite the absence of NEC approval, as required. The submission of these statements in turn resulted in the reversal of the administration decision.
“The general secretary (Mofokeng) and the minister ordered the acting registrar to withdraw the administration,” an insider said this week.
“The reason is there has been compliance on the finances. But they (the finances) weren’t discussed by the NEC, so it cannot be right,” another union insider said.
Another source said: “When our lawyers asked they were told by (acting registrar) Mr Malixole Ntleki that they complied. When Mr Crouse’s date of appeal was announced, Mr Ntleki went and withdrew the application to put Ceppwawu under administration.
“I am very very angry because this means the union is totally dysfunctional. We can’t even get our tax rebate because the union owes the SA Revenue Service, but they deduct PAYE from our salaries.”
If Crouse wins the next legal round and once again decides to pursue placing the union under administration, it will have an even more difficult time convincing him and the Labour Court that the action is not warranted.
In March a writ of execution was granted to the Sheriff of the high court in Durban to attach Ceppwawu’s bank account and its movable goods at the Salisbury Arcade, and auction the property for the sum of R3 268 235 due to debt incurred as a consequence of a relationship between the union and Epainos Corporate Business Consultants.
It is understood that Mofokeng and his allies in KwaZulu-Natal signed an agreement with the brokers on a medical scheme without the union’s knowledge. But they could not honour the deal and the brokers went to court and obtained the judgment against the union.
While Mofokeng was contacted via phone, SMS and whatsapp to get comment on the allegations on a number of times, he did not get back to Independent Media by the time of going to press.
The Labour Department was not forthcoming either. Spokesman Sithembele Tshwete was sent questions but declined to comment claiming that the matter was sub judice as Crouse’s appeal still had to be decided.
Asked if the department had any plans to deal with Ceppwawu and the parlous state the union finds itself in, he said: “We will take a decision once the court processes have been completed.”
Despite all of Ceppwawu’s woes, its leadership also enjoys the support of labour federation Cosatu, whose own divisions have been exploited by Mofokeng and his faction to hold on to power. Mofokeng and his group have aligned themselves to the dominant faction in Cosatu, which appears content to turn a blind eye as the union disintegrates. They have done this by successfully painting their internal opponents as supporters of ousted Cosatu general secretary Zwelinzima Vavi.
In the latest sign of Cosatu's endorsement of the dysfunctional union, Ceppwawu along with three other Cosatu unions will be co-hosting the 17th World Federation of Trade Unions (WFTU) congress in Durban next month.