Guidance

Financial Irregularities in Trade Unions and Employers’ Associations

The Certification Officer’s procedure for investigating reported financial irregularities in trade unions and employers’ associations.

1. Introduction

Under the Trade Union and Labour Relations (Consolidation) Act 1992 (“the 1992 Act” or “the Act”) the Certification Officer (CO) has powers to investigate the financial affairs of trade unions and employers’ associations in certain circumstances. This guidance sets out:

  • when she may use these powers

  • who can approach her with information

  • how she deals with such approaches, including the issue of confidentiality

  • what might be the eventual outcome

These powers are different to when the CO receives complaints from members relating to other areas. To find out what these other areas are and how those complaints are handled, see link to complaints guidance.

None of the powers discussed below affect in any way an individual’s right to take matters to the the officials of the union, the trustees of the property of the union, the auditor or auditors of the union, or the police.

2. When can the CO investigate the finances of a Union?

The CO will consider whether it is appropriate to investigate the financial affairs of a trade union or employers’ association if it appears to her that there are circumstances suggesting one or more of the following circumstances exist:

  • that the financial affairs of the organisation are being or have been conducted for a fraudulent or unlawful purpose
  • that persons concerned with the management of those financial affairs have, in connection with that management, been guilty of fraud, misfeasance or other misconduct
  • that the organisation has failed to comply with any duty imposed on it by the 1992 Act in relation to its financial affairs
  • That a rule of the organisation relating to its financial affairs has not been complied with. Her full powers in this area are set out in in section 37A-E of the 1992 Act .

3. Who can ask the CO to look at a Union’s finances?

Anyone can inform the CO of circumstances suggesting one or more of the situations described above. Her team may also identify references in the media which suggest irregularities in the financial affairs of either a trade union or an employers’ association.

4. How to raise concerns with the Certification Officer

You should write to the CO as soon as possible after you have identified the issue which you are concerned about. You should include any evidence or information which can support your concerns and explain why you think the CO should act. Where possible you should link your concerns to the issues identified in in section 2 above . The CO may not be able to consider your concern if you do not do so.

5. Confidentiality

The CO will normally disclose the name of the person or organisation, who has raised the issue, to the union or employers’ organisation. She may, however, choose not to, for example, where an individual has a reasonable fear that disclosure would result in violence or physical danger. If you believe that your name should not be disclosed you should explain the reason for this when you first contact the CO. Information which is received anonymously at the outset will be considered; however where the issues and the evidence need clarification and explanation, an anonymous approach may be difficult to process further.

6. How an approach is dealt with

The CO will consider the facts and any supporting evidence presented to her. She will then decide whether she will take any further action, and if so, what it should be. The CO will consider how best to respond to the issues which have been raised and has a range of options including;

  • Contacting the trade union or employers’ association for comment or explanation. She may then seek further comments from the person who raised the issue;
  • A member of her team may seek further information, in writing or during a meeting, from the person who raised the issue
  • A member of her team may meet with the union or employer’s association to seek further information
  • Use her powers to require a Union or employers’ association to provide relevant documents such as accounting records or minutes of meetings
  • The CO has powers to appoint inspectors to investigate the financial affairs of an organisation if there are circumstances suggesting any of the situations specified in section 2 above exist. She will also require that the inspectors report on them as she may direct. Inspectors are likely to be either members of the CO’s own staff or, in certain circumstances accountants or solicitors or both. The inspectors have considerable powers and can require the production of relevant documents and the attendance before them of persons who are or have been officials or agents of the organisation in question. The inspectors can also require any other person who may be in possession of information relating to the matter to produce any relevant documents and to be interviewed by the inspectors.

7. Outcome

Sometimes enquiries into an organisation’s financial affairs can identify other problems. If that happens, the CO’s enquiries need not be restricted to the original complaint.

On some occasions facts may arise from the CO’s investigation which may make it necessary to start proceedings against an organisation. In those cases, the CO’s preferred approach is to refer the matters to the relevant authority with power to act (for example the Police), but she reserves the right to start her own action. On other occasions simply bringing information into the public domain will be all that is required.

The CO is often able to resolve issues without appointing an Inspector. If this is the case the CO may write to the organisation concerned setting out her findings and observations, and, where appropriate, noting the action already taken and suggesting preventative action. The CO may place a copy of the letter on the organisation’s public record file. Where the initial approach was made by a member of the union the CO will write to that member notifying him/her of the decision not to appoint inspectors.

If the CO appoints an Inspector she will set out the remit of the investigation and the format of the report. She may direct that an investigation be stopped where she considers it appropriate to do so; for instance, where it appears where she has referred the matter to the police or to a prosecuting body. The CO will publish all Inspection Reports. She will not publish any reports where she has directed that an inspection should be stopped.

Published 15 July 2020