Fraud and the union organiser

In 2001 a trade union employed an organiser and in July 2009 he was charged with fraud and the misappropriation of funds. The union duly held a disciplinary enquiry, the organiser was found guilty and he was dismissed. These are the initial and not-so-interesting initial facts of Diphoko / SATAWU (2009) 18 CCMA 8.9.2.

But then the facts get more interesting. The union’s procedure for joining as a member provided that a potential member was allowed to join free of charge. At this stage, the member is not yet in good standing, because he or she is not yet paying union dues. The potential union member becomes a fully fledged member in good standing only after the employer has started deducting trade union dues or subscriptions in respect of that member.

In other words, it is only once money starts flowing to the union by means of a stop order facility (as it used to be called) that the member becomes a full member of the union. It is not allowed to pay the fees by hand or to have the fees collected in any other way. There was an exception to this rule (in the taxi industry) but even then collection by hand was not allowed – in the case of this exception, the member was allowed to deposit his or her fee directly into the union’s bank account.
The employees at a certain company were looking to the union to represent them during an anticipated retrenchment. At the time the employees met the organiser, they were not members of the union. At the meeting, the organiser agreed to represent them, but told the prospective members that they would have to pay a joining fee and then a monthly fee. One employee collected the monthly fees on behalf of his colleagues and handed the money to a secretary at the union’s office. An employee at another company told more or less the same story.

Now for the organiser’s version: he indicated that he never received the joining fee and also that he did not question the method of payment – he was new at the office and he was under the impression that the same rules would apply as did in the taxi industry. Nor did he know why the secretary was receiving money.

The CCMA commissioner rejected the organiser’s version, saying that he had 8 years experience with the union and his was not a new position. He knew the union’s procedures of getting the money from members – and he was aware that the stop order facility was not available to the taxi industry. He knew that the companies concerned did not fall within the taxi industry, and he could not have been confused as regards the processes.

The conclusion reached by the CCMA commissioner was that the organiser knew full well that he union was not going to get the subscription fees that were being received by the secretary. Because of the misrepresentation by the organiser, it was likely that there would be a loss suffered by the union. The CCMA commissioner concluded that the union had successfully proven that the organiser had breached the rule, and that dismissal was fair.

This conclusion was reached on the basis of the charge of fraud alone. The CCMA commissioner simply said that fraud on its own justifies dismissal. Given the change in our law as regards the fairness of dismissal as a sanction, one would have thought that the commissioner would spend more time and attention on this issue. The CCMA commissioner also correctly lists the definition of fraud as follows: “unlawfully making, with an intent to defraud, a misrepresentation (distortion of the truth) which causes actual prejudice or which is potentially prejudicial to the other.” The commissioner does not, in this case, consider whether the union organiser can be said to have an intent to defraud. The elements of the offence of fraud are not really canvassed in any detail. Is it possible, in this case, to argue that the employee may have been merely grossly negligent?