Local, Independant and Effective

Adjournment debate - Fair Entitlements Guarantee Scheme, Sept 30, 2014

Posted October 01, 2014



CATHY McGOWAN (Indi) (17:49): I rise tonight, to speak about the Fair Entitlements Guarantee Amendment Bill 2014 on behalf of the workers in my electorate of Indi, and to make suggestions to further help workers protected by this legislation and taxpayers, who carry the financial burden of this protection.

The Fair Entitlements Guarantee scheme has been critical for a group of Wangaratta workers who found themselves employed one day and without stable work the next, through no fault of their own. Simply known as FEG, this government scheme provides a government funded safety net for workers who are often suddenly left without a job and without redundancy pay entitlements when companies are liquidated and are unable to pay the entitlements to the workers.

Sadly, this was the case for the 59 Bruck Textile Technologies workers in Wangaratta, in my electorate, who unfortunately lost their jobs suddenly on 11 July this year. Circumstances meant that they were left with no entitlements. Many had been with the company for decades. The sudden liquidation of the company, which had been an icon in Wangaratta and the textile industry for 70 years, came as a tremendous shock to the workforce and especially to the local community.

FEG was immediately spoken about as a government mechanism in place to assist these workers by paying out many outstanding entitlements. This was valued at $3.8 million. Workers were supported by advocates from the Textile, Clothing and Footwear Union. I would like to acknowledge that union, and thank them for their excellent advocacy and terrific ability to work across difference. The workers were worried, however, that these payments would take up to six months to come through. They believed that two months would be the best-case scenario. So, one of the most pleasing aspects of this sad tale was the fact that FEG payments were made more quickly than people in the textile and clothing industry had ever seen occur.

I asked the government to allow the workers access to the scheme as quickly as possible. The Minister for Employment, Senator Eric Abetz, and his department are to be thanked for making good on his commitment to expedite the FEG to get outstanding entitlements paid as soon as possible. For these workers to have been paid most of what they were owed by Bruck Textile Technologies within six weeks, the government is to be commended for its swift and decisive action. I am personally very grateful to the minister for the work that he did.

On 22 August 22, in Wangaratta, I spoke with the redundant workers at a skills workshop (pictured). I quickly learnt that, while they are extremely grateful for the FEG payments and for the work that my staff and I have done with the government, they want the government to take action to improve the scheme—and it is to these comments that I will now address my thoughts. Firstly, they asked us to ensure that workers get all the entitlements they are owed. Secondly, they asked us to legislate to protect workers from the actions and negative impact of companies such as Bruck Textile Technologies. Regarding the workers' entitlements, they told me that not all the accrued and banked time was paid. They felt that they were not paid their full dues. In normal circumstances, when leaving employment they would have been paid these entitlements. The redundant workers feel strongly that they are not to blame for the way their employment was terminated—a feeling which I share.

Regarding the larger issue of Bruck's action as a corporate entity, the redundant workers are angry that the taxpayer is carrying the financial burden for what has occurred. They believe that the company had a responsibility to meet its corporate fiduciary obligations. Some of the workers have spoken with me about their feelings of embarrassment and invalidation. They do not want to rely on charity or be seen to be relying on handouts. The redundant workers also do not want their former colleagues, or any other employees in Australia, to go through what they did when they were suddenly made redundant. This says a lot about the caring nature of these people in my community, who are now looking for work and facing an uncertain future. Fundamentally, they care for their families and the community and do not want their experience to be felt by other people.

The workers came up with a key message and asked me to pass it onto this parliament: 'Don't let this happen again. Protect the people still working. Enact draft legislation that ensures workers who are forced to access FEG are paid their full entitlements such as accrued time and banked time. Enact legislation to stop companies from relying on FEG to pay entitlements.'

It was not only me who had a task to do when I left that workshop. Kerrie Seymour, a long-time Bruck employee, left the workshop that day and put together a petition to the House on this issue. That petition is now with the Petitions Committee, and I will table it as soon as it is returned to my office.

Charles Sargent, a worker made redundant by Bruck, has written to me proposing some powerful and reasonable measures the government should consider to strengthen the oversight of companies:

Ensure adequate powers rest with ASIC or other regulators to monitor and investigate companies to prevent reliance on FEG, increase the scrutiny on the conduct of company directors when the company has initiated liquidation, hold the management of liquidating companies individually liable for failing to provide for the payout of employee entitlements.

Minister Pyne's second reading speech on this bill affirms the government's support for FEG as a necessary safety measure but one that should be used as an exception and a scheme of last resort. When I met with the CEO of Bruck on the day the redundancy notices were handed to workers, I asked him what provisions Bruck was making to provide entitlements to those made redundant. The director said openly that that FEG would provide these entitlements.

In closing, I am very proud that the workers in Wangaratta looked to my office for assistance and that we have been able to help them. I am very proud that I can deliver the relationship of government from a position of being an Independent who really works for the people of Wangaratta. I am absolutely proud to be a representative of these workers. I ask that the government go further than simply limiting the payments available under FEG. If this is the only change that is made to the scheme, it may hurt those who come to rely on FEG in the future. The government should ensure that fewer companies rely on FEG. I call on the government to do more to ensure that companies genuinely make provisions for large redundancies so that FEG can genuinely become a scheme of last resort rather than simply a corporate offload.

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