The South African Labour Court recently placed the Chemical, Energy, Paper, Printing, Wood and Allied Workers' Union (“CEPPAWU”) under administration in terms of section 103A of the Labour Relations Act, 1995 (“LRA”). This means that the entire management of CEPPAWU and its financial affairs are vested in an administrator, much like in the case of a company placed into business rescue (see The Registrar of Labour Relations v the Chemical, Energy, Paper, Printing, Wood and Allied Workers' Union.)
Background
This order resulted from an application brought by the Registrar of Labour Relations, after the union had failed to submit audited financial statements from 2014 to 2017 as well as its agency shop audited financial statements for the same period. CEPPAWU did not dispute its failure to submit these audited financial statements and attributed this to its previous general secretary who had been removed at the end of August 2018. In opposing papers filed with the court, the union requested that it be given a 90-day grace period within which to file its audited financial reports.
The court's response
The court refused the union this indulgence and noted that the application to put CEPPAWU into administration had been launched as far back as September 2018. As late as March 2020, there was still no concrete progress made by the union to gets its financial records in order and comply with its obligations in terms of the LRA.
The court said that it was not in the interest of CEPPAWU's members that the matter be delayed any further, and that granting the order, effectively stripping CEPPAWU's office bearers of their duties and substituting this with the appointment of an independent administrator, was in accordance with the objects of protecting and promoting collective bargaining.
Previous applications
This was not the first time that an application to place CEPPAWU into administration had been brought. The previous application had been launched in April 2015 by the Registrar of Labour Relations, Mr J T Crouse. Similarly, this application had been prompted by the failure by CEPPAWU to file its audited statements for 2010, 2011, 2012 and 2013 and there were additional allegations of expenditure being undertaken without any formal accountability in terms of the Union Constitution and the LRA.
Shortly before the application was to be heard, Mr Crouse's designation as Registrar of Labour Relations was removed by the Minister of Labour, Mildred Oliphant and he was replaced by Mr Ntleki. After Crouse's replacement, an application was made to amend the relief sought and instead of an order being sought for CEPPAWU to be placed under administration, the court was requested to order that CEPPAWU file its audited financial statements within 90 days.
On that occasion, the last minute intervention of the Minister of Labour saved CEPPAWU from being placed into administration but the recent order by the Labour Court sitting in Johannesburg has now effectively ensured that CEPPAWU's affairs are firmly under the management on Administrator.
Unlike in the previous application in 2015, the court was unwilling to permit a joinder application sought by various office bearers in the union. It indicated that joinder would only serve to draw the court into the factional battles within the Union and this would only further inflame these issues at a time when the interests of the whole membership of the Union needed to be preserved.
It has become apparent that the Registrar of Labour Relations is intent on ensuring that unions comply with their audit and reporting responsibilities in terms of the LRA and in the event of a lack of housekeeping the registrar will not hesitate to intervene.
Originally published 18 June, 2020
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