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Numsa moves to bankrupt Cosatu

Oct 23 2016 07:31
Dewald Van Rensburg

The National Union of Metalworkers of SA (Numsa) has threatened to countersue its old federation, Cosatu, into liquidation.

This follows Cosatu’s demand that both Numsa and another former affiliate, the Food and Allied Workers’ Union (Fawu), pay it millions in allegedly unpaid affiliation fees from when they still belonged to the organisation.

Cosatu’s lawyers sent letters of demand for R3.2 million and R5.2 million to Numsa and Fawu, respectively, on September 26.

In a responding letter, Numsa not only denies owing Cosatu a cent, but threatens to lodge a counterclaim big enough to “require the liquidation of the federation”.

One part of this claim relates to about 10 months’ worth of affiliation fees which, according to Numsa, Cosatu has to repay.

Numsa’s affiliation fee was just under R1 million per month, making this demand worth almost R10 million.

These are fees paid to the federation between February 2014, when Cosatu’s leadership decided that Numsa should be expelled, and November 2014, when Cosatu finally did expel the metalworkers’ union.

Numsa paid its fees throughout this period, but claims that it was in effect denied the benefits of membership.

“As such, our client actually holds a significant counterclaim against your client and will pursue this claim to the fullest extent,” reads the letter that Numsa’s lawyers, Vasco de Oliveira Attorneys, sent to Cosatu’s lawyers.

Numsa allegedly suffered additional damages due to Cosatu’s sponsoring of a rival metalworkers’ union, Limusa, which subsequently took Numsa’s place in Cosatu.

Apart from any counterclaims, Numsa also insists that most of the R3.2 million Cosatu wants from it is prescribed because the debts are more than three years old, meaning they can no longer be pursued through the courts.

Fawu is taking a different tack. Unlike Numsa, it was not expelled, but voluntarily left Cosatu in August this year.

It admits it owes Cosatu money, but is disputing the R5.2 million figure. This demand would be “devastating” to the union, which is already in a process of restructuring some of its debts, according to Fawu general secretary Katishi Masemola.

“Membership fees are covering running costs, but we have existing liabilities,” he told City Press. “We don’t have R5 million lying around.”

Fawu stopped paying its fees in December last year, meaning it skipped 10 months’ payments before leaving the federation.

According to Masemola, Cosatu’s own constitution disallows it from claiming all these unpaid fees.

“It says that after six months of nonpayment you are automatically expelled,” he said.

Fawu is trying to whittle the debt down to only three months’ affiliation fees, arguing that the same constitution already partially suspends affiliates after nonpayment of three months.

If you are suspended, you cannot be racking up more fee debt, goes the argument.

Cosatu’s claim, however, seemingly includes R1.9 million related to the political levy that Cosatu members pay in addition to the affiliation fees. “We haven’t paid that in years; it’s not compulsory,” said Masemola.

“I think there are two objectives. One is to get money because they [Cosatu] are broke. The second objective is to choke Fawu,” said Masemola.

He speculated that the loss of Numsa as an affiliate probably hit Cosatu’s finances hard. The union was the federation’s largest private sector affiliate.

Cosatu spokesperson Sizwe Pamla said the federation was still awaiting “official” responses from Fawu and Numsa. “You can’t deal with legal issues via public posturing. We did not make a statement, we sent a letter.”

He acknowledged that Fawu had been struggling financially, but that accounts nevertheless need to be settled when a union disaffiliates from Cosatu.

The federation had been subsidising Fawu before it left, said Pamla. In particular, it paid R1.4 million towards the legal expenses Fawu incurred when participating in the merger proceedings around SABMiller and AB Inbev. “We can’t charge them for that,” he added.

Fawu was also instrumental in calling for a Cosatu special congress, which forced the federation to incur costs as well, said Pamla.

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