Johannesburg - Cosatu is broke; it is struggling to pay the rent and its financial woes are set to be made worse by the costs of its 30th anniversary celebrations and two mooted congresses, officials within the federation say.
The same sources said that Cosatu was looking at job cuts to adjust to a reduced budget and to avoid liquidation.
The labour federation confirmed that the expulsion of its largest affiliate, the National Union of Metalworkers of SA (Numsa) in November, had put a financial strain on Cosatu, as it had lost about R900 000 a month in subscriptions.
Numsa, with a 338 000 membership and the country’s largest trade union, was expelled after internal squabbles at the federation.
Cosatu president S’dumo Dlamini said this week that they were “going through a difficult patch financially”, but denied that the federation was broke.
“I would agree that due to the current situation, it is not possible to have a stable, steady cash flow. We are going through a difficult patch, but we are surviving and are able to carry on with our day-to-day operations. It is not true that we are broke,” Dlamini said.
He denied that Cosatu was looking at job cuts to adjust to a reduced budget and to avoid liquidation..
“The issue of job cuts at Cosatu and liquidation is far from the truth; nobody has even raised it and it is not going to happen.”
Dlamini said the financial squeeze was as a result of some affiliates withholding their monthly subscriptions, “to frustrate the federation and to cause crisis”.
However, he declined to give the names of these affiliates.
Food and Allied Workers Union president Atwell Nazo said it was paying its R295 000 in subscriptions every month.
“Unless we have some financial problem in that particular month, we will jump and pay the next month, but that is not deliberate. We never said we (were) suspending our financial commitments to the federation,” Nazo said.
SA Commercial, Catering and Allied Workers Union’s deputy general secretary Mduduzi Mbongwe said it was up to date with its payments.
Cosatu began cutting costs late last year when it issued an instruction to the provinces to limit shop steward councils to one day instead of three days.
The continuing court battle between Cosatu and its seven affiliates, who temporarily withdrew their participation in solidarity with Numsa, was also costing the federation millions of rands, according to Dlamini.
“Lawyers are expensive; you pay millions of rands and this is an unnecessary expenditure because in order for us to solve these issues through internal processes, some people decided to go to courts.”
He said the issue of Cosatu’s building and rent was the subject of a forensic probe, but denied that the federation was struggling to pay the rent.
Labour analyst Tony Healey said it was not surprising that Cosatu was facing financial difficulties. “It is a pity because Cosatu has a role to play; it is unfortunate that they have these financial challenges but they have themselves to blame.
“One would have thought that they would have taken remedial steps to manage the costs after losing Numsa’s contribution,” he said.
He warned that a broke, fragmented Cosatu would further fracture the labour relations environment.
Numsa national treasurer Mphumzi Maqungo said Cosatu’s financial woes had started before it was expelled.
“Some Cosatu affiliates had not been paying their subscription fees for a very long time, others were in arrears for 10 months. Before we left, we saw that Cosatu was bleeding on all fronts, but financially we covered and paid for other unions,” Maqungo said.
The Communications Workers Union (CWU) is one Cosatu union that Numsa helped out.
Last year Numsa lent CWU R110 000 to help it pay for its legal bill when it was deregistered by the Department of Labour.
“That money was purely for our court case after we had been deregistered and we have made arrangements with Numsa to pay it back over a certain period of time,” CWU treasurer Lionel Brown said.
Brown said the union had been able to pay their monthly subscriptions at Cosatu.
He said they had witnessed a sharp decline in membership since they were deregistered, but could not say how many members they had.
Numsa has stopped helping affiliates, which has put a further strain on Cosatu.
Numsa’s Maqungo said it had helped many unions that were struggling, including those that had later called for its expulsion.