SFO called in over union's hidden millions claim
UPDATE: Meat workers union says it is confident SFO will reject claims by meat processor AFFCO.
UPDATE: NZ Meat Workers Union general secretary Dave Eastlake is "positive" the Serious Fraud Office will reject AFFCO's calls for an investigation.
He told NBR Online the meat processor's claims are mischievous and "a load of rubbish".
Mr Eastlake says union members pay their fees to the branches - which have their own set of audited accounts - and the branch offices pay the national office a capitation fee based on their annual membership.
"AFFCO's claims are mischievous the day before we're going into mediation with them to try and resolve the issue, which is 1000 people locked out of work for the last six weeks."
Mr Eastlake says he hopes issues with the collective agreement will be resolved tomorrow, but adds: "Given their attitude today one could hardly be confident they'll be in the frame of mind to resolve it."
AFFCO's letter to the SFO, written by chief financial officer Nigel Stevens and sent last week, says: "Given the union's failure to comply with statutory financial reporting requirements, irregularities noted in the union's financial statements, combined with the quantum involved, we believe there is a serious risk of dishonesty and/or embezzlement.
"Accordingly we request the Serious Fraud Office investigate this matter, including the reporting irregularities and to account for and trace the substantial sum of unions fees collected in recent years (totalling tens of millions of dollars)."
AFFCO is a wholly-owned subsidiary of Talley's Group. The Talley family is worth an estimated $300 million, according to the 2011 NBR Rich List.
The SFO isn't commenting while it considers the complaint.
Meat company AFFCO has called in the Serious Fraud Office with claims the meat workers union is declaring only a fraction of a likely $5 million annual income.
AFFCO chief executive Hamish Simson told NBR Online the company has asked the SFO to investigate the New Zealand Meat Workers Union because it does not seem to be declaring all its income.
Mr Simson says: "We pay about half a million dollars a year in union fees, in deductions from individuals."
Mr Simson has subsequently confirmed that AFFCO - which has meat processing plants in the North and South Islands - pays all union dues into a single bank account in the NZ Meat Workers Union name.
"The union's accounts, which you can pull of the companies office website, show $700,000 worth of income.
"We're approximately 10% of what they state their union membership is.
"That would tend to indicate there's probably about $5 million of income, so they're only declaring a fraction of it," Mr Simson says.
The complaint originated from AFFCO employees, Mr Simson says.
AFFCO has a peak seasonal staff of more than 3000 and more than 1000 are union members, who pay about $6 a week in union fees.
"Would we have carried on with this if there wasn't a dispute? Absolutely," Mr Simson says.
"We have a responsibility as an employer and if our employees make an inquiry we do need to follow that up."
The nub of the issue is an allegation the union's income from "capitation fees", as listed in its annual accounts, seems to differ by a wide margin from payments deducted from members' wages.
The union repeatedely said last year it was satisfied it was meeting all of its reporting obligations and it was unwilling or unable to explain the apparent discrepancy.
Strikes and lockouts
This year's bitter industrial action has seen weeks of strike action and lock-outs, with many AFFCO workers jettisoning the union in favour of individual contracts.
Yet AFFCO plants are still operating and collective contract mediation is set to resume tomorrow.
"From where we're standing as two organisations the SFO complaint is not worsening the relationship," Mr Simson says.
The union's income reporting was raised publicly last year in newspapers and blog sites.
Mr Simson says the timing of the complaint was prompted by "patience wearing thin".
What does the company hope to achieve? Mr Simson says for the union to declare their full income, adding: "What do they have to hide?"
Meat workers union general secretary Dave Eastlake did not return a call from NBR Online this afternoon.
David Williams
Wed, 11 Apr 2012
Wed, 11 Apr 2012
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SFO called in over union's hidden millions claim
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