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Numsa dips into reserves to pay salaries as members default on R46m in fees

Numsa spokesperson Phakamile Hlubi-Majola says bonuses will be paid on Friday. But to pay the bonuses, Numsa has had to dip into its reserves.
Numsa spokesperson Phakamile Hlubi-Majola says bonuses will be paid on Friday. But to pay the bonuses, Numsa has had to dip into its reserves.
Image: NUMSA

One of SA’s largest trade unions, the National Union of Metalworkers of SA (Numsa), is buckling under financial pressure because members are defaulting on their fees — to the tune of about R46m a year.

This put in jeopardy the December bonuses of about 350 Numsa staff, as well as salary increases in 2020.

HeraldLIVE reported that Numsa deputy general secretary Karl Cloete said in a letter to the union’s employees on December 2 that it did not have the money because members owed it millions of rands.

However, on Wednesday the union told HeraldLIVE that bonuses would be paid on Friday.

In the internal memo, Cloete detailed the union’s money woes, saying it would nevertheless try its best to ensure staff were paid their bonuses and increases.

“As a responsible trade union [which employs] staff to recruit, organise and service metalworkers, we have a duty to alert our staff in the instance that we appear unable to meet our obligations to provide salaries and bonuses as per norm.

“This alert is necessary because families plan their December holiday breaks and the return of children to school in the new year.

“As things stand, the December 2019 central committee would have a difficult time to justify salary increases for 2020. However, this remains a work in progress,” Cloete wrote.

Numsa spokesperson Phakamile Hlubi-Majola said on Wednesday that staff would be paid.

“This is an internal matter and we are dealing with it within the union. We are in the midst of our central committee meeting, where we are accounting to our members about the state of the union’s finances.

“As we speak, bonuses of workers will be paid on December 13,” Hlubi-Majola said.

Cloete wrote that to pay the bonuses, Numsa would have to use loan repayments from the Numsa Investment Company — payments that were meant to go into the trade union’s reserves.

Numsa has 364,144 members and more than 60 offices nationwide.

The financial situation at the union is so bad that it had to dip into its reserves to pay November salaries.

“We have had to dip into our reserves to cover salaries of November 2019, given the fact that our operational and creditor expenses could not accommodate November 2019 salaries,” Cloete wrote.

One staffer, who wanted to remain anonymous, said he found the memo suspicious, particularly because the political party affiliated to Numsa, the Socialist Revolutionary Workers’ Party (SRWP), contested the general election in May.

It received a mere 24,737 votes nationally, a fraction of Numsa’s membership.

“They say they don’t have money and it’s because they spent it all on the elections,” the staffer said.

Previously, Numsa general secretary Irvin Jim, who is also the SRWP party leader, slammed claims that the party was funded from the union’s coffers, saying not a cent of Numsa’s money had been spent on the elections.

In May, Jim said funding came from fundraising efforts.

On Wednesday, Hlubi-Majola said claims of Numsa using its funds for electioneering were a myth that emerged ahead of the election.

“There is no such thing, it is pure fiction. We are audited by multiple institutions, including Sars, [the department of employment & labour] and an external auditing firm, because the law on how union subscriptions are spent is very clear.”

Though Hlubi-Majola said subscriptions were paid to the union weekly or monthly through a stop order from members’ salaries, in line with Numsa’s constitution, Cloete wrote that it had lost about R46m a year in fees from defaulting members.

“Hopefully, with the introduction of debt collection companies, we may defeat this tendency,” Cloete wrote, adding that, as of October, non-payment of subscriptions stood at R24m.

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