Exclusive: CWU union in "financial meltdown" amid "outrageous abuses"

Allegations of “blunders and deliberate abuses” within the communications industry union

The Communication Workers’ Union is on the “verge of a financial meltdown” as allegations from members have surfaced of “outrageous abuses” of money, according to documents seen by Londonlovesbusiness.com.

Concerned members charge CWU chiefs with “a catalogue of blunders and deliberate abuses of the union’s money” and compare the level of financial excess to the MPs expenses crisis of 2009, in a letter sent to all branches, trustees and the national executive of the 205,000 strong union.

The CWU is the seventh largest trade union in the UK, with its members primarily working in the communications industry for companies like Royal Mail, BT and Virgin.

The members chose to remain anonymous as they do not believe “opposing views in the union are welcomed or indeed tolerated within the CWU”. Additionally, they point to a “genuine fear within the union to have an opposing view on issues to that of the union’s elite”.

It is revealed that CWU general secretary Billy Hayes, who is on a salary of more than £90,000, claimed an extra £29,580 in cash payment by converting his accrued 87 days of unused annual leave since 2000.

The union members dismiss claims made by Hayes that he did not take a pay raise in 2005/2006 (as he said in an interview with Londonlovesbusiness.com). They point to figures submitted by the CWU to the Certification Office indicating that Hayes’ salary has risen consistently from 2003-2011 from £74,634 to £90,210.

CWU Billy Hayes Salary

Additionally, a further £133,000 is being paid to other CWU officers for backdated annual leave.

“Members find it hard to understand how massive backdated claims can be substantiated in the first place and even more so, how it is possible to justify these claims over such a long period of time,” the CWU members write.

“Also, surely as a trade union, we should be insisting that our employees at ALL levels take their annual leave in the periods that it becomes due?”

Members have expressed grave concern about the state of CWU-sponsored pension schemes, railing at the “indefensible” choice to run three pension schemes and warning that “there is a potential for the union to be bankrupted by the current pension arrangements”.

When members tried to take these issues with the union, general secretary Billy Hayes responded as follows:

Dear xxxx,

Thank you for you reply.

If you want to ask me a specific question, I will answer youths will be via your Branch Secretary. The correct route for dealing with the concerns of our people is through the democratic structure.

I will of course read the information you have sent to me. Having been a postmen for 18 years,and National Officer for Delivery staff for a further 9 years,I am aware of how difficult things are for our people. I believe the union has done,and is doing a good job in these difficult times.

My offer stands, I will be prepared to visit and speak to you and your members subject to an invitation from your Branch.

Yours Sincerely,

Billy Hayes

Further allegations include claims that CWU officers are using members’ contributions “to pay cheap mortgages, or to pay dodgy holiday pay”.

Other claims include the mismanagement of the union’s political fund, used to run campaigns and political activities, after the fund went from a surplus of £32,193 in 2009 to a deficit of £171,236 in 2010.

The Certification Office, the public body charged with administering union affairs, wrote to the CWU in January 2012 to express concern about the political fund deficit and suggested that it “appears to imply that political fund expenditure has been made out of a non political fund account”. Unions are not meant to spend money from non-political funds on political activities, as laid out by the Trade Union and Labour Relations (Consolidation) Act of 1992.

In reply to the Certification Office, general secretary Billy Hayes said that the deficit was an “unacceptable position”. He admitted that “inadvertently and incorrectly general funds where [sic] used on occasions”.

Hayes has made clear that “this error will not be repeated in the future as we have issued new and strict guidance…and have taken appropriate internal measures”.

“Taking into account the strict controls that we now have in place, this means that no funds other than political fund money will ever be used for political fund payment,” he added.

Hayes’ conclusions were:

  • The union “did not fully identify the deficit until the production of the formal accounts for 2010”
  • “Monies used from the General Fund were paid back once we discovered the deficit.”
  • “New controls have been introduced to ensure no repetition of the situation.”
  • “An independent (bank) and conditional time limited overdraft was secured.”

Concerned CWU members wrote:

“We need to restore the trust, transparency and integrity that has been lost over recent years. We must also ensure that those who are responsible for the continual mismanagement of the members’ money are held to account.”

They have issued a call for a “complete enquiry into the running of the CWU’s finances”, arguing that only this would “avoid bankruptcy and/or a takeover by another union”.

Plans to sell union assets like the Elstead Hotel & Alvescot training centres are mooted in order to “paper over the tracks…[but] it further allows for the gravy train of high pay and excessive perks for the few to continue”.

A CWU member told Londonlovesbusiness.com that the revelations “stink of the worst excess of the MP’s expenses scandals of recent times in how they determine their own pay and reward”.

CWU members have expressed further concern on the independent messageboard for Royal Mail employees, Royal Mail Chat. One user comments that “HQ can either deny it or ignore it…if they’re going to deny it, they better sound convincing and have at least some evidence to back up the denial”.

“Most members know about Billy’s £29k but they aren’t aware about how widespread this “practice” has become.  The situation with pensions…could drag the union under” he added.

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