Anne Urquhart (Tasmania, Australian Labor Party) Share this | Link to this | Hansard source

I have been a representative of working Australians for over 20 years. Through those years my union, the AMWU, I have campaigned for improvements to Australia's workplace relations system in areas such as workers compensation, training opportunities and conditions. Tonight, I rise to speak about a very specific part of Australia's workplace relations system—that is, the protection of workers' hard earned entitlements, such as redundancy pay, annual leave, long service leave and unpaid wages, when an employer is liquidated or declared bankrupt so that they are not wrongly spent and just gone.

For a company to whom a worker has been a loyal employee for decades to use these entitlements as some sort of a short-term, high-risk loan without making any provisions to pay them back is morally wrong under any reasonable standard. For a worker to be faced with a redundancy is a tough enough issue to deal with emotionally and economically without the added stress of missing entitlements. Australia is the country of a fair go. We are a country that believes in reward for hard work, not in the pilfering of workers' entitlements by company directors. This is wrong and the protection of workers' entitlements needs to be enshrined in legislation that will ensure that a worker receives all of the entitlements they have worked hard for.

One such case has occurred at the Automotive Components Limited factory in the northern suburbs of Launceston, in my home state of Tasmania. ACL emerged from a 1986 buy-out of various automotive component businesses owned by Australian motoring brand Repco. The factory site comprises four plants, each serving unique purposes but interlinked in their many processes. The older plants are Nos 1 and 2. Plant 1 produces copper strips with powder sintered onto them which are carted up to plant 2 and used to make car bearings. The newer plants are Nos 3 and 4. Plant 4 produces metallic powders that, at plant 3, are poured from a great height into moulds and then baked. Moulds include high-tech car components as well as parts for stoves, lawnmowers and even lock mechanisms.

The global financial crisis hit the automobile industry hard. Car sales were down, affecting plants 1 and 2, but after-market sales were slightly up, which saw plants 3 and 4 doing better than plants 1 and 2. Further, ACL were normally able to hedge their exchange rate risk but the GFC rendered this unavailable. In August 2009, ACL entered into voluntary administration, placing the jobs of up to 300 Tasmanian workers at risk. However, the ACL voluntary administration was unique; the components manufactured by ACL were crucial to the Australian car industry, with the Launceston factory at the time being the sole supplier of a particular engine bearing for Ford Australia. The closure of this factory would have resulted in a serious production issue for Ford.

Ford had, only some months before, provided a substantial injection of funds to ACL, which had looked to avoid closure when it received this and a multimillion dollar assistance package from the federal and state governments. ACL had run multimillion dollar losses for the previous two financial years, but these cash packages gave workers and the industry hope that ACL would push through. As Ford was a secured lender to ACL as a result of its recent cash injection, it had the power to appoint a receiver-manager. It did so and, due to Ford's requirement for some of the specific components produced by ACL, it sought to continue trading. Unfortunately, within three or four weeks of appointment, the receiver-manager deemed that redundancies were necessary. One can appreciate that a company that had recorded losses of $11.5 million and $8.7 million in the previous two financial years and had received government and private sector bailouts but could no longer remain financially viable would need to restructure and that through this restructuring some 105 jobs would be lost. As an organiser at this factory for a number of years, I got to know a lot of the workers very well and days like that were terribly disappointing.

The shock of redundancies was one thing but to then discover that the bank was empty and no funds were available for entitlements was a whole extra shock for these workers. ACL's director Ivan James had used his employees' entitlements— annual leave, long service leave as well as provisions for redundancy payments—as a high-risk, short-term loan, which we all quickly found out the company had no capacity to pay back. This left ACL's redundant staff with nothing from the company. Most of the people had worked at ACL for many years—some for over 40 years of their life. They had given everything. They had collectively gone without pay rises and taken on fewer hours so that they could all keep their jobs and keep the company going.

At the same time, the managing director, Ivan James, did contribute to the issues the company was facing by reducing his income to $1 a week, as he advertised on the SBS Insight program around that time. However, once the company received government assistance, Mr James went back to his voluptuous salary of over $7,000 a week. But that was not enough. He then awarded himself an additional $2,000 per week. Some would say this was to make up for lost time. The workers saw it as a massive kick in the guts. From this revelation, the workers were angry—so angry that over 120 attended a barbecue lunch on the nature strip in front of Mr James's property one Saturday with one question on their minds, emblazoned upon T-shirts they all wore. That question was: 'Where are my entitlements, Ivan?'

The government somewhat assisted these workers through the General Employee Entitlements and Redundancy Scheme, GEERS. I say 'somewhat' because these workers were given a redundancy payout of up to 16 weeks—four months—pay. And the taxpayer had to foot the bill. Some of these employees had been with ACL for decades. Their enterprise agreement had provided for four weeks pay for every year of service in the event of a redundancy, with a cap of 96 weeks for workers who had in excess of 25 years employment. There was one worker who had over 40 years of service who would have been owed about $110,000, but because of the limit of GEERS at the time he got only $28,000. That is a worker whose family missed out on over $80,000 in payment—a payment that could have seen this worker enjoy a decent retirement; a payment that would have given a respectful end to his years of commitment and hard work at that factory.

This Gillard Labor government believes in protecting workers' entitlements. An election commitment from the 2010 federal election titled the Protecting Workers’ Entitlements package was released by Prime Minister Gillard in July 2010, at around the same time as the AMWU National Conference. In this election commitment, the Prime Minister promised to change the GEERS operational arrangements to provide workers' full entitlements, including redundancy pay up to a maximum of four weeks for each year of service, all annual leave, all long service leave and up to three months of unpaid wages. The Prime Minister promised to replace GEERS—which is an administrative system—with the Fair Entitlements Guarantee, which will be enshrined in legislation to ensure it cannot be abolished or easily amended so that the entitlements of Australian workers are protected.

I was a Senate candidate at this time of the announcement and the National Secretary of the AMWU, Dave Oliver, said to me after the announcement that this would be one of the pieces of legislation that I would see passed as a new senator and that it would be a very proud day when that occurred. To the credit of the Gillard Labor Government, the Minister for Tertiary Education, Skills, Jobs and Workplace Relations, Chris Evans, and the Parliamentary Secretary for School Education and Workplace Relations, Jacinta Collins, amended the GEERS to fix the redundancy pay issue from 1 January this year. This was a tremendous step forward for working Australians and for the Australian union movement.

A fond memory of the campaign was the time spent with former ACL workers whose redundancies had left them many thousands of dollars out of pocket but who recognised that if Australia re-elected a Gillard Labor government workers' entitlements would be protected in the future. These workers knew that any changes would not provide them with any extra payments but, in the true solidarity of the trade union movement, they knew that if other workers faced redundancy as they had, their colleagues—their mates—would receive their correct entitlements. People could see a real problem that a Labor government was committed to solving, if re-elected.

In 2011, hundreds of workers across Australia have been made redundant only to find that their company has not put money aside to pay their entitlements. This includes a further 33 workers at ACL in Launceston who were recently made redundant. However, thanks to the Gillard Labor government, the federal Labor member for Bass, Geoff Lyons and the AMWU, there was a positive light for these workers. While they were faced with the terrible news that they were being made redundant, the amendments to the GEERS operational arrangements saw them receive their full redundancy entitlements, four weeks for every year of service—money that would allow time for retraining or for the transition to a comfortable retirement; money that these workers knew would not be possible without a Gillard Labor government. It was quite touching to hear from former ACL workers a few weeks ago that their service and their collective action had been rightfully recognised.