The ACTU welcomes the opportunity to make a submission to this inquiry of the Parliamentary Joint Committee on Corporations and Financial Services because working Australians, their families and the wider community have a vital interest in the long-term viability and sustainability of well-governed and competently managed businesses (however they are structured) that provide secure, well-paid jobs.
When businesses fail and enter formal insolvency direct and indirect employees (labour-hire, dependent contractors) risk losing and/or having delayed access to entitlements, are exposed to financial hardship and stress precipitated by sudden job loss, involved in protracted wind-ups and then being permanently detached from the labour market or forced in precarious work. In this context employees, especially older workers, can’t afford ‘to learn through failing’ and face catastrophic setbacks in their standard of living and future well-being when the business they work for fails. Many workers get no real second chance because the capped Federal Entitlements Guarantee (FEG) excludes, in whole or in part, untaken sick leave, unpaid non-ongoing payments/commissions, unpaid voluntary and superannuation guarantee contributions, accrued time (such as TOIL), long standing wage underpayments and unremitted payroll deductions to nominated third parties.
The ACTU and its affiliates have been involved in dealing with the consequences of high-profile corporate failures such as Ansett, Queensland Nickel, and Virgin Australia. However, every day unions are representing their members in insolvencies and business-related bankruptcies that go unheralded in the media but nonetheless impose significant costs on workers, their families, the communities in which they live and on the wider public. For this reason the ACTU has contributed to the Productivity Commission’s consultations during its 2015 Inquiry into Business Set-up, Transfer and Closure and made submissions during inquiries into the misuse of the Fair Entitlements Guarantee. Relatedly the ACTU made a joint submission to the Treasury on the establishment of a beneficial ownership register and the current review of the Modern Slavery Act. The ACTU intends to make a submission to this Committee’s announced inquiry into ASIC’s capacity and capability to respond to reports of alleged misconduct.
This submission provides a broad overview of the key issues with insolvency and bankruptcy. It is by no means a comprehensive statement on the topic from Australian Unions. In this regard we support and commend to the Committee other submissions made by trade unions to this inquiry.