31st January 2003

Union Payoffs About to be Exposed

At a hearing last week, ex General Secretary of the Labour party, Jim Mortimer, an amicus member since 1942, was asking for an order from the Trade Union Certification Officer to allow him to inspect the accounts of Amicus MSF.

Jim was accompanied by Sue Millman and Tom Harding, the ex President and Secretary of MSF's London Region. The union head office's side consisted of a highly paid barrister, an accountant and Alex McKenna, assistant to Joint General Secretary Roger Lyons.

The union had frustrated all previous attempts by Jim and the Treasurer of London Region to look at the accounts, despite union Rule 56, "Inspection of Books", which says:

"All members wishing to examine the financial records of the Union shall be entitled to do so on giving reasonable notice to the General Secretary."

So Jim was forced to resort to the Trade Union and Labour Relations Act (Right of access to accounting records):

"30. —(1) A member of a trade union has a right to request access to any accounting records of the union which are available for inspection and relate to periods including a time when he was a member of the union."

The Certification Officer started by outlining the known information for which Jim was trying to uncover details. In addition to normal redundancy payments:

£653,000 was paid out by MSF in 1999 to 18 ex-employees
£569,000 was paid out by MSF in 2000 to 22 ex-employees
£415,000 was paid out by MSF in 2001 to 15 ex-employees
£1.6 million in total

Whistleblower Marcia Solomon received £50,000 after she took her case to an Employment Tribunal. Potential whistleblowers Howell John and Bryan Keegan (Lyon's Chauffeur) received £108,000 and £35,000 respectively in return for not going public with a Tribunal case. The biggest secret payoff of all (rumoured to be over half a million pounds) was to ex Assistant General Secretary John Chowcat in 1999, when he was dismissed for exposing corruption at the highest levels in the union.

The Certification Officer observed that Jim's repeated applications to the union had "got nowhere, which is why we are here today."

Jim had specifically asked to look at accounting records relating to secret payoffs. At the last minute the union's barrister had attempted to scupper part of Jim's case by maintaining, bizarrely, that only Chowcat's payoff was subject to a confidentially clause; Jim could not inspect any other ex employees' payoffs as they were not secret! Catch 22: If it's not secret we won't let you see it, if it is secret you can't see it; the union were also arguing that in Chowcat's case, the confidentially agreement they had got him to sign meant they did not have to disclose details under the TULR Act, effectively an 'opt out' of the Act.

Jim said that all he wanted was transparency within the union which was effective for democratic control. Even the National Executive of the union did not know the payoff details. He was not asking to inspect personal salary information for existing employees.

Under cross examination, official Alex McKenna was repeatedly asked why Jim could not inspect the records of people paid off amounts in excess of their normal terms of employment. McKenna replied that he could not inspect them because they were NOT confidential and Jim in his application had only asked to inspect confidential matters! He also revealed that Bryan Keegan's payoff had been made under the Disability Act. Keegan, who worked as Lyons' chauffeur from 1998 to 2000, was known to despise Lyons, describing him as a "complete and utter disgrace" and exclaiming "the man's a liar" during the Solomon Tribunal while Lyons was present. He had signed an affidavit alleging, amongst other things, that he delivered four cases of MSF paid-for wine to Lyons' home.

McKenna appeared to argue disingenuously that agreements where the amount of the payoff had been disclosed were not confidential even where they contained clauses that were secret and that bound the parties to secrecy.

There was considerable discussion as to what constitutes an "accounting record" within the meaning of the Act, and the barrister clearly lost a long legal discussion with the Certification Officer on the matter. Jim maintained an accounting record should record a payment; the amount, what it was for and why it made. The barrister argued that there was no obligation to disclose why a payment was paid in the accounts, citing the example of the purchase of a PC. Where a payment was made as the result of a contract like a payoff agreement, Jim argued that at least those parts of the contract which related to payment should be available for inspection.

Finally the union barrister requested, with a straight face, that if the Certification Officer did rule against the union and order that they allow Jim to view the accounting records, that the actual amounts first be blacked out!

The Trade Union Certification Officer is expected to rule on the case in three weeks time. Watch this space.
[NEW - Update]
Posted by www.rogerlyons.com on 31st January 2003, updated 10th March 2003