The Federal Government has had plenty of warning on the issue which is now causing such strife in the automotive industry.
About 300 workers of the TriStar steering and suspension company went on strike over the failure of the company to entertain negotiations over protecting employee entitlements during enterprise bargaining negotiations. The company supplies components to major manufacturers who have now stood down, or are about to stand down, 12,000 workers. It seems that that TriStar was the first company to be hit by a campaign by the Australian Manufacturing Workers Union to set up a fund to protect employee entitlements.
The campaign arose after the failure last year of National Textiles, a company in which the Prime Minister’s brother, Stan Howard, was a key manager. About 300 employees stood to lose about $11 million in holiday, long service and other entitlements. However, the federal government bailed them out on a special-case basis. Since then, many other companies have failed, leaving employees in the lurch. Perhaps the largest was the case of OneTel in which 1400 employees were owed at total of $25 million.
The Government has had more than a year to deal with the problem. It is simply not good enough for companies to spend employees entitlements on day-to-day trade and when they go broke to leave the cupboard bare, leaving employees to be ranked with other trade creditors.
For the Government to do nothing is hypocritical. After all, in the case of employers taking tax instalments out of wages, the Government has legislated to ensure that they are deposited with the Taxation Office regularly. There can be no question of employers using employees’ tax instalments for day-to-day trade, so why should not the same will rule apply to other funds taken from employees’ wages or otherwise earned by employees, such as holiday and long service pay. This is employees’ money and should be kept in trust so that if the company goes broke the employees will get their entitlements.
It seems that companies have not been prepared to set the money aside in their own trust fund. Nor has the government set up a fund into which money could be paid. Small wonder then that workers through their unions have sought to set up their own scheme. They have called the scheme Manusafe. Under the union’s scheme the union will have most of the control of the fund. If employers or the Government object they only have themselves to blame.
The Minister for Workplace Relations, Tony Abbott, has inflamed the situation by calling the strike at TriStar industrial treason. Such a strike by so few people that takes out an industry that employs so many can easily be characterised as blackmail or treason, but that is far too simplistic. One should look beyond the instant action. In at the Industrial Relations Commission this week TriStar admitted it that it had categorically opposed Manusafe on the advice of its employer organisation, the Australian Industry Group, which has taken the position that employee entitlements after a corporate failure were a matter for the whole community not just of the company or industry affected. This is morally untenable. Companies should not be allowed to trade and risk other people’s money. There is ample evidence that many companies have been doing so in the past few years. The companies and the Government have had ample time to do something about it, so they have to take the lion’s share of the blame for the present disruption in the automotive industry.
Employers should sit down with unions this weekend to work out a way in which employee entitlements can be protected. Doing nothing is not an option.