BY ALISON DELLIT
The ripples from the Ansett debacle continue to widen. On September 18, the Australian Council of Trade Unions estimated 60,000 jobs — hotel workers, taxi drivers and tourist industry workers — are threatened as a direct consequence of the airline company's collapse.
On September 20, lead and zinc mine workers discovered that their jobs are also on the line when mining giant Pasminco also crashed. The company announced it had placed itself under voluntary administration.
Federal treasurer Peter Costello's insistence that the Australian economy is fine is sounding increasingly hollow.
As the inevitable recession approaches and more companies collapse, the question of guaranteeing the security of workers' entitlements is of pressing importance.
While the employee entitlement package announced by employment minister Tony Abbott on September 20 is a victory for workers, offering the best protection to date of workers entitlements when employers go bankrupt, it also has serious flaws.
For many years, when a company collapsed, the employees often walked away with little or none of their outstanding entitlements such as annual leave, long-service leave or redundancy payments. According to company law, workers were not paid what was owed them until all "secured creditors" (generally banks and other corporations) had received their money.
After the 1999 collapse of National Textiles (a company part-owned by Prime Minister John Howard's brother Stan), the federal Coalition government introduced a limited tax-payer funded scheme to pay some monies owed to workers.
Abbott's scheme is much better in two ways: it guarantees eight weeks of redundancy pay, up to $75,000 and it includes a proposal to change the law to make workers' entitlements payable before secured creditors.
The government will only step in if a company's assets are insufficient to fund the payment of entitlements. This provision represents the greatest victory for the trade unions' campaign, and a significant backdown for the government.
But it is outrageous to argue, as Abbott and Howard have previously attempted to, that a bank that chooses to lend money to a financially shaky company should have a greater right to recover its debts than the workers employed by it.
However, the government's scheme is just too little, too late. Although Abbott is claiming that it guarantees "90% of workers 100% of their entitlements", this is untrue.
For example, Ansett employees were entitled to extra redundancy pay for every year of service, capped at 102 weeks. The government's promise of eight weeks' pay comes nowhere near meeting many employees' entitlements.
Even worse, the scheme still provides no mechanism to force employers to protect all employees entitlements, all of the time. This stands in stark contrast to the scheme proposed by the Australian Manufacturing Workers Union, known as Manusafe. Manusafe would force employers to pay workers' entitlements into a fund jointly managed by the union and employers.
Under a Manusafe-style scheme, tax payers would never be forced to pay a company's debts. Union supervision of the fund would guarantee that workers' entitlements were paid in at the correct, regular intervals. And investments made by the fund would not be used to prop up ailing companies or misused in other ways.
The federal Labor opposition has also argued for an insurance scheme which employers would be required by law to pay money into. However, Labor does not support any union control over the scheme.
The federal government's concession on workers' entitlements is the result of the extremely strong public support for legal protection of workers' basic entitlements. It is also an attempt to placate public opinion which strongly favours government intervention to stop Ansett's collapse.
The challenge for the unions is to build on, and mobilise, this support and run an even bolder industrial campaign to protect workers at a time when company collapses will become much more frequent and their impact much worse.