Mr Ivan Fitzpatrick Employment Benefits Payments



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SpeakersLynch Mr Paul; Debus Mr Bob
BusinessPrivate Members Statements

Mr IVAN FITZPATRICK EMPLOYMENT BENEFITS PAYMENTS

Mr LYNCH (Liverpool) [6.02 p.m.]: I draw to the attention of the House the serious events that have befallen Mr Ivan Fitzpatrick, a constituent of mine. For some 27 years he worked for the Peakwood Industries Group. He started as a driver and worked his way up to branch manager. On 20 September 1996 an administrator was appointed to the group and on 17 October 1996 that person became liquidator of the group in a voluntary liquidation. As of October 1996 Mr Fitzpatrick no longer had a job. Moreover, he did not receive any of the employment benefits to which he was entitled. He estimates that the sum owed is close to $30,000, comprising long service leave, holiday pay, pay in lieu of notice and redundancy pay. That also includes over $2,000 in superannuation payments, being both employer contributions in arrears and employee contributions deducted by the employer from his pay but not paid to the superannuation fund.

The collapse of a company with no regard being given to an employee’s entitlements is not unique. The situation in this case is slightly different in that all the other employees of the group did receive payment of their entitlements. Mr Fitzpatrick did not, even though there were still funds available for him to be paid. In about July 1995 one of the principals of Peakwood told Mr Fitzpatrick that he would be transferred from Peakwood Industries Pty Ltd to Snokilt Pty Ltd. He was told that this was simply an administration company and it would cause no other change to his employment. Just how inaccurate that proved to be is revealed in a letter from Jirsch Sutherland, chartered accountants, who were the liquidators. In a letter to Mr Fitzpatrick dated 2 December 1996 they said:
      I note that you were an employee of Peakwood Industries Pty Limited’s service company, Snokilt Pty Limited. I have sought legal opinion as to whether Snokilt Pty Limited employee creditors were entitled to claim as employee creditors of Peakwood Industries Pty Limited. I advise that as a former employee of Snokilt Pty Limited you are not entitled to claim as employee creditor of Peakwood Industries Pty Limited. I appreciate that this may seem harsh but I have an obligation to all creditors of Peakwood Industries Pty Limited to only admit, as creditors, those persons or companies with valid claims. Snokilt Pty Limited is a completely separate entity from the company in liquidation.

The concession by the liquidator that this seems harsh puts it very mildly. Because of what is simply a technicality Mr Fitzpatrick has been precluded from receiving his just entitlements. Snokilt, the administration company, did not trade. It had no assets. The only income it seems to have received was a management fee from Peakwood to allow it to pay wages. At liquidation it had no money and no assets. In substantive terms, at a commonsense level, Mr Fitzpatrick seemed to be employed by Peakwood. For example, workers compensation premiums to cover Mr Fitzpatrick were paid by Peakwood, not Snokilt. No business cards, letterhead or the like for Snokilt were ever printed. Mr Fitzpatrick used Peakwood business cards with the words "Branch Manager" printed on them.

Snokilt had no stationery and no telephone connection or telephone number. Mr Fitzpatrick was instructed to attend various business conferences and promotions representing Peakwood. At such events he handed out business cards, made deals and made appointments for Peakwood. Several employer superannuation payments were made in relation to Mr Fitzpatrick by Peakwood while he was employed at Snokilt. Snokilt was simply a shell of a company and could only be an employer in a highly technical, legalistic sense and not at all in a substantive sense. The result of this technicality however, is that despite funds being available in Peakwood, no entitlements were paid to Mr Fitzpatrick by Jirsch Sutherland. That is despite the curious fact that Jirsch Sutherland paid Mr Fitzpatrick as an employee of Peakwood during its administration.

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Naturally enough, Mr Fitzpatrick has tried several avenues to obtain redress. His complaint to the Australian Securities and Investments Commission was rejected because it was outside the jurisdiction of the commission. However, ASIC suggested, amongst other things, that the complaint might be referred to the Australian Competition and Consumer Commission, referring the commission to section 52 of its legislation. Mr Fitzpatrick did precisely that. The ACCC response, however, was extremely disappointing. In a letter to Mr Fitzpatrick dated 25 September the ACCC conceded, in effect, that it had jurisdiction to investigate the matter. However, the ACCC said:
      Unfortunately the commission cannot resolve all matters which come to its attention and its functions are not designed to take the place of available civil remedies. The commission’s priorities lie in pursuing matters which benefit the public as a whole as opposed to resolving individual complaints.

In short, Mr Fitzpatrick is not important enough to warrant the ACCC sullying its hands with him. I find that attitude quite appalling. The ACCC is happy to attack the Maritime Union of Australia and to intervene with large corporations but when it comes to doing something for an ordinary person who lives in my electorate it has absolutely no interest. I take this opportunity to publicly call on the ACCC to investigate this matter. I also ask the Minister for Energy to refer the matter to the Attorney General in the other place to see if some legislative change can be made to prevent this sort of thing from occurring in future.

Mr DEBUS (Blue Mountains - Minister for Energy, Minister for Tourism, Minister for Corrective Services, Minister for Emergency Services, and Minister Assisting the Premier on the Arts) [6.07 p.m.]: I record my undertaking to do as the honourable member for Liverpool has suggested and to refer his questions to the Attorney General in the hope that the Attorney General may be able to do something to compensate for this appalling attitude by the ACCC.