Trade union watchdog REOPENS inquiry into secret exit payments to FBU national officers / Chatchawan Wayobut

THE OFFICIAL trade union watchdog has REOPENED her inquiry into allegations of financial irregularities at the top of the Fire Brigades Union (FBU).

Back in July, this blog reported that several members and former officials of the union had made a formal complaint to the watchdog – whose official title is the ‘certification officer’ – after it was discovered that at least three national officers serving at the union’s head office in south-west London had received secret and substantial pay-offs when departing the union. These payments were in all cases covered by non-disclosure agreements (‘gagging clauses’), and not even the union’s ruling executive council was given the full details.

The complainants pointed out that the failure by the FBU leadership to declare the payments in two important financial documents – namely the union’s annual return to the certification officer and annual statement to members – was a breach of section 32 of the Trade Union and Labour Relations (Consolidation) Act 1992 (‘the Act’), which requires unions to disclose all payments and benefits (including termination payments) awarded to members of their principal executive committee.

In the case of the three national officers, the FBU leadership declared the regular salaries and benefits awarded to them, but conspicuously failed to disclose details of the substantial termination payments.

On 30 November, the leadership issued a self-congratulatory ‘all members’ circular proclaiming that it had successfully resisted the allegations of financial irregularities and that the certification officer had now closed her inquiries. Appended to the circular was a copy of a letter from the certification officer which informed the union that she did not consider the three national officers to be members of the union’s executive council and that it was not therefore necessary for the union to have disclosed the termination payments on the financial statements. Having drawn this conclusion, the certification officer confirmed that her inquiry was now ‘closed’.

However, after learning of her decision, the complainants wrote again to the certification officer and pointed out that she appeared to have applied the wrong test on the matter. The question of whether the national officers were members of the executive council under the union’s rules was irrelevant (in fact, the complainants had never suggested that these officials were members of the union’s executive council). What mattered was whether the national officers were ‘members of the executive’ as defined by section 32(7) of the Act – and that was a different test entirely.

Under that section of the Act, a person will be considered to be a member of a union’s executive – and must therefore have all payments and benefits disclosed on the annual financial statements – if he or she under the rules or practice of the union may attend and speak at meetings of the union’s principal executive committee (other than for the narrow purpose of providing the committee with factual information or with technical or professional advice – such as that which the union’s lawyer or accountant might provide).

Along with their letter pointing out that the certification officer appeared to have applied the wrong test, the complainants provided an abundance of evidence – including extracts from minutes of executive council meetings, executive council papers, and a detailed legal argument setting out the history of section 32(7) and the intention of parliament when enacting it – showing that the national officers were plainly captured by section 32(7) and ought therefore to have had their termination payments disclosed on the annual financial statements.

On 18 December, the assistant certification officer, Michael Kidd, replied to the complainants. In his letter, Mr Kidd did not deny that the certification officer had applied the wrong test. In fact, he stated that the certification officer was grateful to the complainants for their helpful comments on this point and that she had resolved to ‘look again’ at the relevant tests. (It is hard to see this as anything other than a tacit admission that the complainants’ concerns were well-founded and that the wrong test had indeed been applied. After all, if the certification officer had applied the correct test, Mr Kidd would surely have said so.)  

In addition, Mr Kidd confirmed that the certification officer had resolved to consider the detailed and comprehensive evidence submitted by the complainants in support of their argument that the national officers were caught by section 32(7).

Mr Kidd advised the complainants that the certification officer would be taking the matter up again in the new year and, in light of the fresh developments, may write to the union seeking an explanation. He also confirmed that it remained open to the certification officer to appoint official inspectors to investigate the matter further.

All of which means that the circular issued by the FBU leadership congratulating itself for having been ‘completely successful in answering these allegations made against our union’ has been made to look rather premature.

Despite the claims by the leadership that it has done nothing wrong – and even regardless of the outcome of any complaint to the certification officer – the fact remains that a small number of officials at the top of our union arranged secret and substantial departure payments to senior colleagues, and barely anyone knew what was going on. What’s more, all attempts by members to find out the full details of the payments have met with obstruction and evasiveness. In a so-called democratic organisation funded by members’ subscriptions, such behaviour is utterly indefensible.

Fortunately, some FBU members are not prepared to stand by and watch the leadership get away with this sort of disreputable conduct. This story has a long way to go yet.

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