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Liquidation threat hangs over Sama over millions owed to union Samatu

Samatu's administrator wants Sama to wind up, saying it owes the union close to R400 million in membership fees alone.

Picture: www.samedical.org

JOHANNESBURG - The South African Medical Association (Sama) could be liquidated if the administrator of its union, the SA Medical Association Trade Union (Samatu), has his way.

According to Gerhard Vosloo's court application filed last week, he wants Sama to wind up as it owes the union R370 million in membership fees alone.

He said in papers seen by Eyewitness News that the association failed to pay that money despite several demands, and therefore it should be considered insolvent. Sama, meanwhile, argued that the monthly membership fees it received belonged to it as a professional body for doctors.

The Labour Registrar placed the union under administration in October last year following several contraventions of the Labour Relations Act. This led to a raging legal battle between Sama, a non-profit professional association, and the trade union administrator. The union represents about 7,500 public sector doctors.

Vosloo was then appointed by the court to, among others, take control of the cash, investments, shares and other securities and assets owned or administered by all on behalf of the trade union.

Samatu has been in existence for 24 years; receiving membership subscriptions, agency fees and other bargaining council levies meant for the exclusive use of the trade union. Sama’s problems date back to the union’s inception in 1996, as it failed to open a separate bank account for the union as required by law. Instead, union members’ subscription fees were paid into the association’s bank accounts. Sama has told the courts that at no time did it intend to establish a trade union that was a separate entity from the association.

Calculations made by Eyewitness News show that, with interest, the association could have collected close to R1 billion. The administrator wants Sama to pay back the money.

Vosloo contends that Sama’s conduct was unlawful as it simply ignored that the Labour Relations Act requires trade unions to be independent and to operate as independent organisations controlled by members and elected officials. Sama and the trade union are governed by different laws, with the association regulated by the Companies Act.

In reply to the letters of demand seen by Eyewitness News, Sama’s lawyers bizarrely argued that the trade union was never in operation, nor did it function and therefore it could not turn over the union’s records to the administrator as required.

It further said that Vosloo would do well to properly consider the legal position before starting the winding up process as it might not be as easy as he wanted it to be. The battle is expected to be heard before the courts soon. When Vosloo applied to the court to seek an order to force Sama to hand over all the necessary documents, Sama contended that they did not exist. In that case, Labour Court Judge Andre van Niekerk ruled in favour of the administrator.

The judge did not hold back, saying that for Sama to assert that there was no union and that there were no union members was at best delusional, at worst a massive hoax and possibly fraud perpetrated on the Labour Registrar, bargaining councils and other parties to the councils and the union’s members.

Vosloo also described in court papers how Sama had at every turn frustrated his efforts to carry out his mandate.

In May, the Labour Court granted Samatu and the administrator an order forcing Sama to hand over several records, including membership databases and financial statements of the trade union. The very next month, Sama appealed the Department of Health and National Treasury’s decision to change the account details for monthly membership fees from Sama to that of the union. Sama lost this application too.

When it applied to the High Court in July over the same matter, the judge described their actions as "forum shopping", warning that the court had the right to protect itself against abuse.

Administrator Vosloo described in his court application seeking to liquidate Sama that it became clear to him that the association was "gravely concerned" about losing access to and control over the income derived from the stop order facilities for subscriptions from the doctors employed by the state who were members of the union.

He also said that the professional body was attempting to delay and frustrate the administration of Samatu to retain its income stream.

Sama has argued that it never intended to form a union but rather a professional body for doctors in both the private and public sector.

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