Union boss walks off with half a million

From today’s Sunday Times:

THE former boss of a union whose lavish perks and expenses have been investigated by the taxman received a pay and benefits package worth £515,000 — more than three times the prime minister’s salary.

720 jobs axed Tata steel in Rotherham where workers, once represented by Michael Leahy, right, have lost their jobsMichael Leahy’s remuneration in 2013 was boosted by a “golden goodbye” payment worth more than £318,000, according to newly published accounts.

His retirement as general secretary of Community, which represents steel workers, followed an investigation by HM Revenue and Customs (HMRC) that exposed a regime involving chauffeurs, “self-authorised” expense claims and corporate entertaining at international rugby matches.

Around 2,500 jobs in the British steel industry have been lost in the past four years. Tata Steel last week announced plans to shed 720 posts, most at its plant in Rotherham.

Leahy, 66, who was general secretary of the union and its precursor for 15 years before his departure, was paid a salary of £105,368 during his final year in the role and £34,544 in benefits, according to accounts filed at the Certification Office, which monitors trade union finances. Benefits included payments towards the mortgage on his detached home in Hemel Hempstead, Hertfordshire, and providing a chauffeur. His package also included £56,392 in national insurance contributions.

The “termination payment” of £318,814 to Leahy, who left school at 15 to work at the Planteg stainless steel works near Pontypool, Gwent, is among the highest recorded for a union boss in recent years.

Leahy had previously been critical of executive pay at the steel giant Corus. When the company announced in 2003 that a bonus scheme for bosses would go ahead despite job losses, he said: “This is another example of fat cats looking after themselves and it must be stopped.”

This weekend, Leahy defended his payoff. “That was the standard package for [a] leaving general secretary. The last three general secretaries before me had basically the same terms,” he said.

“We have saved thousands of jobs. In my period we retrained 30,000 members and put them back to work. I think we have done far more in practical terms than other trade unions to enhance pay and conditions and create job security.”

However, Community attracted the attention of HMRC over its tax liabilities during Leahy’s tenure. In September 2012 the taxman issued an information notice demanding the union hand over documents relating to the pay, perks and expenses of its senior staff.

It wanted to establish whether or not Community had tax liabilities from the use of pool cars, chauffeurs and funds spent on entertaining such as “cricket membership”, rugby hospitality, a Burns supper and other dinners.

HMRC also requested information about “unreceipted expenses” of union officials and Leahy’s “self-authorised” expense claims.

Community supplied some information but was fined £300 for not supplying everything requested. In November 2013 a tax tribunal judge dismissed an appeal from the union against the information notice and fine.

Leahy, a former president of the TUC, said Community had one driver who was available to him and other senior officials, and one pool car. He said union officials would “occasionally” entertain guests at Wales international rugby matches at the Millennium Stadium in Cardiff. He described HMRC’s inquiry about cricket membership as “nonsense”.

Leahy said Community had approval from HMRC for officials to claim expenses in the way they did but that “out of the blue” it decided it “wanted to change the rules”.

“HMRC came in and said, ‘No, that is now not appropriate.’ Even though we had sanction to claim expenses in a particular way, they said, ‘No, it’s now not satisfactory, you have got to change it all over again,’” he said, adding that his retirement was not related to the HMRC probe.

Community, which also represents betting shop workers, social care workers, backroom staff in football clubs and staff in the textiles and carpet industries, was established in 2004 and has its roots in the Iron and Steel Trades Confederation. It has donated around £1.8m to the Labour party since 2004.

Leahy is now a member of the Central Arbitration Committee, a governmentappointed body that settles union recognition disputes.

A spokesman for Community said: “All matters between HMRC and Community have been resolved apart from one outstanding issue which relates to honoraria payments to our volunteers.”