Medical body denies accusation of fraud
The South African Medical Association (Sama) has been accused of fraud and misappropriation of funds by former leaders of its now dissolved trade union.
Sama, a nonprofit company that protects the interests of 16,300 South African doctors for a fee, decided to collapse its trade-union structures at a 2015 board meeting, saying that it had become ineffective and the move was meant to improve and optimise the representation of employed doctors in the private and public sector.
However, the general secretary of the union at the time, Mahlane Phalane, has revealed in court documents that the association has continued to collect millions of rand deducted from doctors’ salaries as union subscription fees.
Although it is still a registered union, the South African Medical Association Trade Union does not comply with requirements of the Labour Relations Act and the labour registrar has warned several times that it would be deregistered.
Since the decision to halt the union activities, Sama has continued to receive up to R8m in agency fees from the council
Phahlane, with the backing of leaders and members of the union, has launched an application in the High Court in Pretoria seeking to preserve all assets belonging to the trade union.
He claimed the association has been channeling funds from union accounts into its profit-making subsidiaries as "loans" that are never recouped. It had also recorded in its financial statement that more than R6m was spent on a union annual general meeting in 2016, although the union was defunct at the time, Phalane said.
The former leaders have also stated that Sama does not have the legal authority to disestablish the union in terms of the constitution of the trade union and the Labour Relations Act.
Sama is registered in terms of the Companies Act, while the trade union was meant to be a vehicle for the labour relations needs of its members, which also afforded them protections provisioned for in the act. These included the ability to be part of the Public Service Co-ordinating Bargaining Council where it negotiated the conditions of its employees in the public service.
Since the decision to halt the union activities, Sama has continued to receive up to R8m in agency fees from the council, despite not having a leadership or structure in place fulfilling the functions of a trade union as the Labour Relations Act dictates.
In its answering affidavit, Sama opposed the relief sought by Phalane arguing that when it founded the trade union, it was never meant to be a separate entity to the association.
"The reason for registering Sama as a trade union was simply to enable Sama to provide employed members with a full suite of services," it said.
"The applicant is called upon to provide evidence in support of this allegation," read the affidavit compiled by Sama GM Manivasan Thandrayen.
Correction: July 27 2018
Sama [the South African Medical Association] finds it regrettable that the Business Day articles — Medical body denies accusation of fraud, published on February 26; and Plan to disband Sama union no longer on the cards, February 27 — created the incorrect impression that trade union activities are not taking place and that funds are misappropriated. Had Sama been asked to clarify these allegations, it would have pointed out that its trade union activities are fully functional.
Sama would also have clarified that, since its inception in 1996, the trade union has been subsidised by the company.
It should be noted that, in the first instance, doctors join Sama because they want to belong to a professional association that caters for the specific needs of medical professionals in SA, including but not limited to trade union representation.
Sama members pay membership fees to receive a variety of benefits and these fees are higher than average trade union-only fees. Members do not exclusively belong to the trade union (almost half of them cannot belong to a trade union because they are in private practice), and when they do belong to the trade union by virtue of the fact that they earn salaries, their professional association membership fees are proportionally allocated — not only contributing to trade union services but also to overarching professional services, such as interaction and negotiation with all major players in the health industry on their behalf, exclusive access to medical journals, and discounted rates from various member benefit partners. Agency fees are, however, allocated to trade union activities in full.
It is naïve to allege that Sama misappropriates membership fees without considering the above and without taking into account that income must equally relate to expenses to ensure adequate services. Sama can account for every cent, as is evident in its annual audited financial statements.
Sama welcomes this opportunity to set the record straight.