Liberal Democrat candidate for Police and Crime Commissioner for Northumbria Dr Jonathan Wallace said:
"Recent Sunday Times reports have raised important questions about the current and former Labour MPs for Wansbeck as to whether their actions in their capacity as union officials have been transparent and in compliance with relevant trade union regulations and law. It is manifestly in the public interest that revelations about the NUM's Northumberland branch and the role of the current and former Labour MPs for Wansbeck receive the fullest possible scrutiny. So far, Mr Lavery's public statements have not adequately addressed questions that have been put to him.For this reason the North East Liberal Democrats have formally requested that the Certification Officer responsible for regulating trade unions fully investigates concerns relating to non-declaration of interests, non-registration of political donations, and non-compliance with trade union regulations, and that he takes appropriate steps to ensure that the union's records are preserved for investigation given the union is supposedly in the process of winding up its affairs.Given the seriousness of these issues, we repeat our call upon Labour North to take steps to suspend Mr Lavery from the party whilst these allegations are fully investigated.We also invite the Leader of the Opposition to state whether the party believes Mr Lavery can continue in his position as the Opposition frontbench spokesperson on trade unions whilst under investigation for breaches of trade union regulation and legislation."
Grounds for the Certification Officer to appoint inspectors to investigate the Financial affairs and Membership Records of the National Union of Mineworkers (Northumberland Area)
The National Union of Mineworkers (Northumberland Area) (referred to in this paper as “the Union”) has been listed by the Certification Officer as a Trade Union since the enacting of the Trade Union and Labour Relations (Consolidation) Act 1992 (as amended) (referred to in this paper as “the 1992 Act” or “the Act”). Although a Trade Union in it’s own right, the Union is also a constituent member of the National Union of Mineworkers,
In that time, it has had two General Secretaries, Ian Lavery (1992-May 2010) and Denis Murphy (2010-Date).
It was not, originally, an asset rich union. In 1993, the union reported a total income of £44,190 and expenditure of £83,289. Total Salary expenditure was £4791. As a result of a deficit of some £40,000 and £100,000 in 1994, the Union started 1996 with a general fund of £25,555. In 1996, the Union transferred its political fund of £35,656 to the General fund. This provided sufficient funding to maintain the union for the year.
The Union’s finances began to improve from 1996, when it began to record donations in relation to the “Vibration White Finger” and “Chronic Bronchitis and Emphysema”. The Union AR21 forms do not indicate the precise nature of the donations, but Mr Lavery and Mr Murphy have both stated that the money represents a voluntary donation by former miners from their Coal Health compensation scheme awards to their Trade Union.
The funds involved were significant for a Union of 240 members. In total the Union received some £1.6million between 1998 and 2010 and another £100,000 from Common Law Condition Fees. By 2006, the Union had assets of £928,064 and one part-time member of staff (the General Secretary also served as President of the National NUM).
However, just eight years later, the Union reported a membership of only 10, the general fund was in deficit by -£43,884, and the Union was only able to present their accounts on a going concern basis after the Trustees were advised that the winding up of the NUM (Northumberland Area) Provident and Benevolent Fund would provide sufficient resources to continue.
The purpose of this note is first, to set out the basis on which the Certification officer would be entitled to require documents from and/or launch an inspection of, the financial affairs and administration of the union, and second, to highlight particular areas of concern that provide the grounds for, and in some case may merit further focus from, such an inspection.
An inspection and documentation process is needed immediately as the both the AR21 forms and the statements of Mr Murphy to the media indicate that the Union may shortly wind itself up, having exhausted the general fund and having few apparent sources of alternative income.
If this happens, valuable documentation will be lost, and in all likelihood, there will be no opportunity to discover what happened, no ability to provide restitution if needed and no ability to identify if fraud, misconduct or misfeasance played a role in the decline of the Union.
THE CURRENT AUTHORITY OF THE CERTIFICATION OFFICER
The power of the Certification officer to require documents and to appoint inspectors to investigate the financial affairs of a Trade Union is found in the Act.
Part I, Chapter III of the Act gives the Certification officer responsibility for the investigation of the financial affairs of trade unions.
Specifically, Section 37A gives the Certification officer the following authority:
(1) The Certification Officer may at any time, if he thinks there is good reason to do so,give directions to a trade union, or a branch or section of a trade union, requiring it to produce such relevant documents as may be specified in the directions; and the documents shall be produced at such time and place as may be so specified.
(2) The Certification Officer may at any time, if he thinks there is good reason to do so, authorise a member of his staff or any other person, on producing (if so required) evidence of his authority, to require a trade union, or a branch or section of a trade union, to produce forthwith to the member of staff or other person such relevant documents as the member of staff or other person may specify.
(3) Where the Certification Officer, or a member of his staff or any other person, has power to require the production of documents by virtue of subsection (1) or (2), the Certification Officer, member of staff or other person has the like power to require production of those documents from any person who appears to the Certification Officer, member of staff or other person to be in possession of them.
The authority to appoint inspectors to investigate the financial affairs of a Union is granted to the Certification Officer in Section 37B of the Act.
(1) The Certification Officer may appoint one or more members of his staff or other persons as an inspector or inspectors to investigate the financial affairs of a trade union and to report on them in such manner as he may direct.
(2) The Certification Officer may only make such an appointment if it appears to him that there are circumstances suggesting—
(a) that the financial affairs of the trade union are being or have been conducted for a fraudulent or unlawful purpose,
(b) that persons concerned with the management of those financial affairs have, in connection with that management, been guilty of fraud, misfeasance or other misconduct,
(c) that the trade union has failed to comply with any duty imposed on it by this Act in relation to its financial affairs, or
(d) that a rule of the union relating to its financial affairs has not been complied with.
The Documents that must be produced for the certification officer are defined in Section 37A (6) as “accounting documents, and documents of any other description, which may be relevant in considering the financial affairs of the trade union.”
In the event of an investigation, under Section 37B (5), the inspectors may require “accounting documents, and documents of any other description, which may be relevant to the investigation”.
THE FUTURE AUTHORITY OF THE CERTIFICATION OFFICER
On 1 June 2016, Part Three of the Transparency of Lobbying, Non-Party Campaigning and Trade Union Administration Act 2014 (“the Lobbying Act”) will give the Certification Officer new powers to require the production of documents in relation to membership registers where he thinks there is good reason to do so and to appoint an inspector to investigate and report upon whether there is or has been a breach of section 24(1) of the 1992 Act.
24(1) A trade union shall compile and maintain a register of the names and addresses of its members, and shall secure, so far as is reasonably practicable, that the entries in the register are accurate and are kept up-to-date.
Section 24(ZH) of the Lobbying Act gives the Certification Officer the power to require documents relating to the register “if the certification officer thinks there is good reason to do so”.
The documents that may be required are defined under Section 24ZH (2) as
(a) the register of the names and addresses of the trade union’s members, and
(b) documents of any other description which the Certification Officer or authorised person considers may be relevant to whether the union has failed to comply with any of the requirements of section 24(1) (duties regarding the register of members).
As in the 1992 Act, a power of appointing Inspectors is created in the Lobbying Act when “it appears to the Officer that there are circumstances suggesting that the union has failed to comply with a requirement of section 24(1), 24ZA or 24ZB (duties etc relating to the register of members).”
It follows from the above that the Certification officer may:
- 1. Appoint an Inspector to investigate a trade union if appears to him that there are circumstances suggesting a Union’s “financial affairs are being or have been conducted for a fraudulent or unlawful purpose”or that “persons concerned with the management of a union’s financial affairs have, in connection with that management, been guilty of fraud, misfeasance or other misconduct”, or that the trade union has “failed to comply with any duty imposed on it by this Act in relation to its financial affairs”, or that “a rule of the union relating to its financial affairs has not been complied with”.
- 2. If he believes there is good reason to do so, require a Trade Union to produce “accounting documents, and documents of any other description, which may be relevant in considering the financial affairs of the trade union.”
Additionally from June 2016, the Certification office may:
- 3. Appoint an Inspector to investigate a trade union if appears to him that there are circumstances suggesting the union has failed to “compile and maintain a register of the names and addresses of its members” or failed to “secure, so far as is reasonably practicable, that the entries in the register are accurate and are kept up-to-date.”
- 4. Require a Trade Union, if he believes there is good reason to do so, to produce the register of the names and addresses of the trade union’s members, and any documents which the Certification Officer considers may be relevant to whether the union has failed to comply with any of the requirements of section 24(1).
Unless indicated, all figures are taken from the Union’s AR21 forms or the accounts submitted to the Certification Officer annually.
THE ELECTION AND APPOINTMENT OF THE GENERAL SECRETARY
Section 46 of the 1992 Act states that
1. A trade union shall secure—
- a. that every person who holds a position in the union to which this Chapter applies does so by virtue of having been elected to it at an election satisfying the requirements of this Chapter, and
- b. that no person continues to hold such a position for more than five years without being re-elected at such an election.
The position of General Secretary is included in the list of posts to which this applies.
Over the period 1993-2016, there is no reference to the holding of an election of any sort to the position of General Secretary of the Union in either the AR21 forms or other public records. If this is the case, on what basis therefore did Mr Lavery hold the position of General Secretary from 1998 to 2010, or Mr Murphy hold the position from 2010 to date? According to Mr Lavery and Mr Murphy and the Union’s AR21 forms, Mr Murphy became General Secretary of the Union on 7th May 2010, on the day of Mr Lavery’s redundancy and election as Member of Parliament. When was an election held for this post?
If the union position is that the elections were unopposed under section 53, on what basis did the Union comply with sections 46 (all positions must be elected), 47 (no member should be unreasonably excluded) and 49 (appointment of scrutineers).
This is a financial issue as if the General Secretary held their position without proper authority, their salary, benefits and other rewards would therefore have been paid unlawfully, and represent a breach of section 45 referenced above.
Further, all decisions, expenses payments authorised by the General Secretary and/or the executive would be similarly invalid.
- 1. The Certification officer should require the Union to provide evidence of any and all elections held for the position of the General Secretary and the Executive compatible with the 1992 act.
- 2. If the evidence provided does not satisfy the Certification officer that the position of the General Secretary was as all times compatible with the provisions of the 1992 act, he should appoint inspectors into all financial decisions made by the authority of the General Secretary and the executive in any period in which there is a lack of evidence to support that such positions were held validly.
Political donations are controlled by the Act in section 71 and 72,which forbids any contribution to the funds of, or on the payment of expenses incurred directly or indirectly by, a political party; unless the payments are made from a properly constituted political fund.
Since 1996 the Union has had £44 in their political fund each year. Despite this, the union has made several donations with clear political objectives of a value significantly higher than £44.
The union gave:
a) £1,000 to Wansbeck Labour party in 2001
b) £1050 to Blyth Labour party in 2001
c) £2,400 for a “memorial publication” for Denis Murphy, the local MP at the time.
d) £3,500 to the Wansbeck Labour party in 2005
e) £650 in total to the Blaydon, Durham and “Wear and Tyneside” (sic) CLPs in 2005
f) £4,692 for “MP campaign and office furnishings” in 2010, by which time Mr Lavery was Labour’s prospective parliamentary candidate.
A number of other donations are recorded which may be political in nature, including to Wansbeck DC, WCLP, CLP and “Labour research”.
Further types of payments forbidden are set out in Section 72 including:
(b) on the provision of any service or property for use by or on behalf of any political party; in connection with the registration of electors, the candidature of any person, the selection of any candidate or the holding of any ballot by the union in connection with any election to a political office;
(d) on the maintenance of any holder of a political office;
(f) on the production, publication or distribution of any literature, document, film, sound recording or advertisement the main purpose of which is to persuade people to vote for a political party or candidate or to persuade them not to vote for a political party or candidate.
A union donating to a political party from the General fund is a clear breach of the Act. A union donating to “MPs campaign” and “memorial publications” is in breach of the rules if the purpose appears to be electoral. A union judged to be paying funds to maintain a holder of office (by ex gratia payments, housing subsidies, or benefits such as holidays) is in breach of the Act.
This means several payments made to Mr Lavery after his election as MP for Wansbck would be a breach of the Act, if they were not in fact a redundancy payment, but instead a way to provide him with supplementary maintenance.
Finally, in 2009, Mr Murphy declared in the register of MPs interests that in 2008 he had taken a 14 day trip to Australia to attend a seminar on Coal and Climate change. No specific cost of this trip is found in the AR21 for the relevant years, but the cost of conferences was over £38,000 that year, over £20,000 more than in any other year to 1993. The only record found of any conference in the dates declared is a one day seminar. If the trip declared was largely not a working visit but a holiday, then the sum provided would be a breach of the act under ‘maintenance of a public official”.
Could the Union have made these payments within the Act?
Existence of valid political fund
The first issue is whether the Union has a validly constituted political fund at all. Sections 73 states that that a fund can only exist if a majority of members have voted to establish one, and specifies that such a ballot must be held every ten years. There appears to be no record of a political fund ballot for the Union back to 1993.
- 1. There is a need to establish when the last ballot to establish or continue a political fund was validly held. If it was more that ten years prior to the donations, no payment of the type outlined could have been made legally by the union, from any fund.
- 2. The Certification officer or his inspectors should therefore require the provision of documents to confirm when NUM Northumberland last held a Political Ballot.
Donations from general fund
Even if a fund existed, this money was clearly paid from the General Fund, as the claimed political fund of the union consisted of only £44 throughout this period according to the unions AR21 forms.
Indeed, Mr Lavery has apparently claimed that “the party donations were from money transferred from the Northumberland NUM’s political fund to the union’s general fund during the 1990s.” (Sunday Times, 27 March 2016). On the face of it, this admits a clear breach.
Transfer to Political fund
It is possible the union may claim that the money was transferred to the political fund from the political fund before being paid out to the recipients.
However, Section 83 of the act states that even if this is the case and the political fund remained a valid fund, money cannot be transferred from the general fund in this way, as “There may be added to a union’s political fund only— sums representing contributions made to the fund by members of the union or by any person other than the union itself, and property which accrues to the fund in the course of administering the assets of the fund.”
1. As complying with the restrictions on support political objects are a duty in the act, and the requirements of the act on the operation of political funds must be treated as rules of the union under section 82 (1)(A) of the, the evidence above on political donations clearly demonstrate that:2. This creates legitimate grounds for the Certification Officer to appoint Inspectors as he is empowered to do under section 37B.
- a. The union has failed to comply with a duty imposed on it by this Act in relation to its financial affairs
- b. A rule of the union relating to its financial affairs has not been complied with.
- 3. The Certification Officer should therefore appoint inspectors to examine the financial affairs of the union, including all payments made to those in public office, donations to political parties, officers and former officers active in politics, and housing, conferences, holiday and other benefits offered to or received by those in public office.
On May 7th 2010, Mr Lavery, then General Secretary of the Union, was elected as the MP for Wansbeck. The same day, the previous MP for Wansbeck, was appointed as General Secretary to replace Mr Lavery, as recorded in the AR21 form for that year. Over the next three years, Mr Lavery received £30,600 in 2010, £30,000 in 2011 and £1,398 in 2012. In each year, this was recorded as “redundancy” in the relevant AR21.
In 2013, the Union accounts record a charge of £85,426 for “past General Secretary Redundancy costs”, though this is not recorded in the AR21 form, as it was in previous years.
The first issue is in what way was this a redundancy, whether statutory or voluntary? The statutory definition of redundancy is found in section 139 of the Employment Rights Act 1996. As Mr Murphy was immediately appointed to the role of General Secretary, it is hard to see how the end of Mr Lavery’s time as General Secretary was a redundancy in the normal sense of the word. Further, Mr Lavery (for example on his website) and the National NUM (in their AR21 for 2010) both referred to Mr Lavery’s departure as NUM National President. Is it plausible that Mr Lavery could resign as President of the NUM national union on the same day he was made redundant from the Union?
Next, if the payments were not redundancy payments, on what basis were they made? Were these payments contractual, voluntary choices of the Union executive, or an agreement between Mr Murphy and Mr Lavery?
Mr Lavery has said he does not recognise the £85,426 payment in 2013. (Sunday Times 13th March). If this is the case, and the £85,426 was not in relation to his employment, the payment has been fraudulently recorded and an inspection is required.
First, if Mr Lavery had in fact resigned from his position in order to become an MP in 2010, on what basis was he receiving ‘redundancy’ in 2013?
Second, why are the claimed payments so irregular? Why was the union paying £85,426 in ‘Redundancy costs’ in 2013, after paying only £1,398 in 2012? Did it represent a payment beyond the original settlement, and if so on what basis was it authorised?
Third, why would Mr Lavery deny having received a legitimate redundancy payment?
Finally, as Mr Lavery is an MP, and the Union is forbidden to support the maintenance of those in public office, making such a payment in a disguised manner would itself be misconduct by the officials concerned.
Clearly, even if Mr Lavery was mistaken when speaking to the Sunday Times, and the £85,426 was indeed paid in relation to his ‘redundancy’, several issues require investigation.
- 1. The certification officer or his inspector should investigate if the payment of £85,426 which Mr Lavery did not recognise was a fraudulent accounting of funds.
- 2. The certification officer or his inspector should investigate on what basis and to whom each redundancy payment was made, for what purpose it was intended, and on what basis authorised.
- 3. The Certification Officer or his inspector should investigate the precise nature of all payments to Mr Lavery after May 2010 in order to support any investigation proposed above on the Political donations of the union.
- 4. The certification officer or his inspector should investigate whether all tax due on the payments was paid.
TRIPS TO AUSTRALIA, CUBA AND INDIA
Mr Lavery has confirmed that the Union paid for visits for himself and others to Cuba and India in 2002 and 2003. In total, these trips are recorded as costing the union c£20,000 in 2002 and 2003, though it is unclear if the expense recorded include some other expenses, donations or contributions related to the visit.
Further in 2008, Mr Lavery and Mr Murphy travelled to Australia for c14 nights for a seminar on coal and climate change. The Union’s conference expenses for that year for the Union were over £38,000, over £20,000 higher than in any other year.
- 1. The Certification officer should requires the provision of information regarding the visits to Cuba and India to discover on what basis they were a legitimate use of union funds.
- 2. The Certification officer should require the provision of information regarding the payment of Mr Murphy and Mr Lavery’s expenses on their visit to Australia to discover whether they were a legitimate use of union funds, with special reference to whether Mr Murphy’s expenses represented a maintenance in office or benefit to a public official.
NUM (NORTHUMBERLAND AREA) PROVIDENT AND BENEVOLENT FUND
There are multiple references in the Union AR21 forms to the existence of a fund known as “The NUM (NORTHUMBERLAND AREA) PROVIDENT AND BENEVOLENT FUND” (or variations thereof). (Afterwards referred to as ‘the Fund”). The Fund is not registered as a company, nor as a charity, nor is it included within the funds of the Union.
Section 23 (2) (e) of the 1992 act specifies that a union may establish a separate fund for the “purpose only of providing provident benefits”. Such a fund is protected from the enforcement of awards against a Trade Union,
Section 23 (3) of the defines “provident benefits” as including:
A) any payment expressly authorised by the rules of the union which is made—
i) to a member during sickness or incapacity from personal injury or while out of work, or
ii) to an aged member by way of superannuation, or
iii) a member who has met with an accident or has lost his tools by fire or theft;
B) A payment in discharge or aid of funeral expenses on the death of a member or [the spouse or civil partner] of a member or as provision for the children of a deceased member.
The fund is recorded as making a large number of transactions with the Union. These include:
- 1. Paying a contribution to the Salary of the General Secretary from 1999-2014, usually of the order of 2/5th of the General Secretary’s Salary. Over the years, this amounts to a net contribution to the Union of c£350,000.
- 2. Writing off a loan to the Union of £109,911 in 2007.
- 3. Receiving £50,000 from the Union in 2003.
- 4. Advising the Union that the Fund would contributing the remaining assets of the Fund to the Union in 2015. (Statement in the accounts, 2014 AR21 form)
Further, until March this year, the Fund was recorded by the land registry as having a charge over Mr Lavery’s home address, Mr Lavery has confirmed that a loan existed and was made in 1994. Mr Lavery has told the press that “the arrangement with the NUM ended over eight years ago’ (Sunday Times, 20th March 2016). However, Mr Lavery has not confirmed whether the loan was paid back, explained why the charge remained on his property until this year, stated the terms of the loan, whether it represented a contractual benefit of his employment as General Secretary, or why the charge continued after his employment ended.
Finally, if the loan was indeed granted as “an arrangement with the NUM”, as Mr Lavery has stated, this raises the issue of why such an arrangement was not disclosed in the relevant Annual Returns of the Union an obligation of the Union’s under the Section 32 (3)(aa) (iii) of the 1992 Act, which requires that “details of the salary and other benefits provided to or in respect of” the General Secretary shall be contained in the Annual Return of a Trade Union..
The existence of the fund and the payments it has made therefore raise several questions that need to be inspected.
Given that the Fund has made over £350,000 of payments to the Union for salary purposes, written off a loan of £109,911 to the union and lend money for the purchase of property for the benefit of Union officials, there is a clear reason to believe that the Fund is not a fund ‘for the purpose only of providing provident benefits” as set out in the 1992 Act.
Further, as recently as last year, the Union was advised that the winding up of the fund would lead to a financial benefit to the Union, and that Mr Lavery refers to his home loan as an ‘arrangement with the NUM’, there is reason to believe that the fund is either controlled by, or a trust for the benefit of the Union. However, neither the names of the trustees, the finances of the Fund, or the basis for its payments are recorded in the Union’s records.
There is therefore no clarity on whether any or all payments made by the fund are in accordance with the act, whether as “a separate fund” solely “providing Provident benefits”, or as a fund controlled by the Union and therefore subject to the declarations required of the Union under section 32 of the 1992 Act..
Further, as the Fund was making payments to officers of the Union (such as home loans) why were these not recorded in the relevant section of the Union’s AR21 funds, were such payments declared to all relevant authorities, and were members of the Union made aware of them in the annual statement to members required by section 32A of the 1992 Act?
Finally, it is worth noting that the Union operated two other funds, the “Rehabilitation fund” and the “Sympathy fund” which it incorrectly stated were separate external funds to which the Union held a liability up until 2013. In that years AR21, these same fund were restated as ring fenced funds of the Union, and their assets transferred to the General Fund. This makes it more likely that the Provident and Benevolent Fund has similarly been incorrectly defined by the Union.
- 1. The certification officer should appoint an inspector to examine the legal status, control, payments, sources of funding, finances and loans of the Fund, including the the identification of trustees, appointment process, finances, accounts, payments and basis for decisions.
- 2. The inspector should be asked to ascertain whether it was an independent fund properly existing solely to provide provident benefits to members, or acting against the provisions of the act in this regard.
- 3. The inspector should be asked to ascertain if the Fund was in reality an fund of the union, the finances of which should have been reported to the Certification Officer and members of the Union, and to which the financial restrictions and reporting requirements of the Union under the 1992 Act should have been applied.
MR ALLAN STEWART AND THE 20 WANSBECK ROAD PROPERTY
The 2012 Accounts attached to the AR21 form of the Union record that a property in Wansbeck Road was sold to Mr Allan Stewart, a member of the executive of the Union, for £70,000, despite being valued at £85,000 by a chartered surveyor. The reason given was that the property was tenanted. In 2013, a nearby property of the same external appearance was sold for £113,000.
Mr Stewart is registered by the Land Registry as being the owner of 20 Wansbeck Road, Ashington, since 4th September 2012. No mortgage or charge is recorded on the property and no price was stated for the property. Electoral Roll records suggest that the tenant of 20 Wansbeck Road, Ashington at the time may be related to Mr Stewart.
- 1. The certification officer or his inspector should require evidence that the purchase of 20 Wansbeck Road did not unduly benefit Mr Stewart and his family by discounting the price of the property at 20 Wansbeck Road.
From 2002 to 2012 the membership of the Union was exactly 240 members for each and every year. In 2011 and 2012, the Union recorded that it did not have the address of any of these members. From 2013, the Union stated its membership as 10.
The reported membership of the Union from 2002-2014 is surprising, given
- A. The fact that the final pit in Northumberland closed in 2005/06.
- B. There is no apparent loss of membership to other unions, death etc for a decade
- C. 230 members apparently leave the union in the same year, 2013, after a decade of unchanged membership.
As noted above, the Union and its officers had a duty to maintain accurate membership register throughout this period. On June 1st 2016, the Certification Officer will gain the authority to inspect the records of the Union if they have a reasonable belief that this duty was not complied with.
The duty to maintain an accurate and open register is important, as without such a register, the duties of the union regarding notification of members of the Union's finances, holding of elections, ability to hold officials to account identified in the 1992 Act cannot be properly conducted.
Further, as only members of the Union could complain to the certification officer over breaches of a number of the duties in the 1992 Act, the failure to properly maintain such a register could prevent the investigation of and restitution for any such potential breach.
As noted above, there is a significant chance that the Union will be wound up before June 1st 2016. If this is the case, documents related to the Union could well be lost. Therefore it is urgent that action is taken to prevent any such risk, without pre-empting the powers granted to the Certification Officer under the Lobbying Act.
- 1. The Certification officer should immediately appoint inspectors to investigate the amount of subscriptions paid to the Union over this period, and on June 1st 2016 extend their remit to the maintenance of an accurate membership register.
- 2. The Certification officer should inform the NUM Northumberland Area that on June 1, 2016, he intends to require information on membership of the Union from 2002-15, to confirm that the records were and are correctly maintained.
- 3. The Certification Officer should inform the Union that prior to June 1, 2016 all such information relating to the register should be preserved, and that the Union should not be wound up, records destroyed, dispersed or otherwise disposed of prior to that date.
The issues identified above should not be seen as single potential breaches of rules or duties, but as a pattern of concerning related issues over the finances, administration, membership and legal compliance of the Union. While each individual potential breach is itself significant, it is also reasonable for the Certification Officer to consider the evidence in the round, when considering whether the finances of the union meet the tests set out in the 1992 Act for the appointment of inspectors. He might also consider that in issues of financial propriety, it is often essential for inspectors to have access to the full range of available information in order to assess whether an individual apparent breach is related to another potential breach in a sustained attempt to avoid or hide non-compliance with the obligations imposed by law, or is rather merely an isolated error, mistake or poor administration deserving a lesser penalty or simple correction.
In this case it seems that there is more than enough evidence for the certification officer to authorise a full inspection of the Union’s finances, and from June 1st 2016, membership register and administration. Such an inspection should be carried out by a fully independent inspector, with the support needed to identify any and all legal or accounting errors, breaches and irregularities and to seek responses from present and former officers, trustees, legal representatives, auditors and accountants of the Union and any related bodies, trusts and funds.