Page: 9938
The Hon. P. T. PRIMROSE [6.27 p.m.]: More than 200 workers Australiawide stand to lose their jobs and entitlements after their employer deliberately set up a company without assets to employ them. The workers are employed by Steel Tank and Pipe Pty Ltd, which fabricates heavy metal construction equipment in a range of companies in Western Australia, Queensland, Victoria and New South Wales. As well as their jobs, the workers will lose more than $3 million in accrued entitlements, such as long service leave and superannuation.
Receivers, PricewaterhouseCoopers, has been appointed to act on behalf of the National Australia Bank, which is the company's major secured creditor. The latest receivership, involving the Carrington plant in Newcastle, occurred on 3 November. The first time employees of the company found out that they were in a position of great jeopardy was when they received a letter from PricewaterhouseCoopers as the receivers. The letter from PricewaterhouseCoopers stated:
I advise that I was appointed Joint and Several Receiver and Manager of the above company's (the R & M Companies) on 3 November 2000, together with my Melbourne partner …
I have investigated the records of the R & M Companies and advise that these records indicate that you are not employed by any of the R & M Companies.
I am however informed by Messrs Brad and Stephen Weeks that you are employed by one of the following companies:
Steel Tank and Pipe Manufacturing Pty Limited
STP Fibreglass Pty Limited
L. W. Weeks Holdings Pty Limited
STP Administration Pty Limited
Steeltank Pty Limited
("Employer Companies")
Messrs Brad and Stephen Weeks are Directors of each of the Employer Companies.
Attached is a schedule detailing the name of your employer and your employee entitlements estimated as at 3 November 2000. Your employee entitlements arise under your contract of employment with your Employer (named in the attached list) and are the responsibility of that Employer.
At a subsequent meeting with the receiver on 9 November the employees discovered that they had been transferred, without their knowledge, by the directors, Brad and Stephen Weeks, into shelf companies that held no assets whatsoever. Paul Bastian, State Secretary of the Australian Manufacturing Workers Union [AMWU], which represents the workers, has said that the waterfront dispute with Patricks had set an example that was being followed by such unscrupulous employers. Mr Bastian argued correctly that what Patricks did was to show that if a company wanted to avoid its responsibilities for workers compensation, wages and entitlements, all it had to do was transfer its employment to a shelf company with no assets.
Australia's Corporations Law offers absolutely no protection to employees caught up in that sort of scam. The AMWU is calling for changes to the Corporations Law to protect employees in those circumstances. The Federal Government has a responsibility to protect workers who become the victims in any transmission of businesses to a company with no assets. The Federal Government should introduce heavy penalties against company directors who deliberately arrange for their employees to lose their entitlements. The National Australia Bank is the major secured creditor for this company. It has just recorded its highest ever profit at $3.2 billion. The bank should drop its preferred status so that the workers can be paid. Under the Statutory Protection Scheme promoted by Federal Workplace Relations Minister, Peter Reith, the workers at STP would lose most of their entitlements.
The AMWU has established an Industry Trust Fund called Manusafe, which would ensure that workers' entitlements were paid on a weekly basis into a secure trust fund. This would ensure that regardless of the arrangements made by their employer, workers' entitlements could not be misused, as they have in this case. It is just not good enough to have laws that protect only wealthy company directors and allow workers to be ripped off.