The Australian http://news.com.au/common/story_page/0,2294,263808%255E421,00.html Reith plan to make directors pay By SID MARRIS and DAVID NASON 29jan00 COMPANY directors may have to pay workers entitlements out of their own money if a court finds they deliberately tried to avoid their commitments under plans already approved by senior federal ministers. The provisions are part of a package Employment Minister Peter Reith will take to cabinet on February 8, following a series of company collapses that have left workers without money owed them, including the 312 employees of National Textiles who were told yesterday they would receive just $7.2 million of their $11.3 million in entitlements. The employees of the NSW Hunter Valley cloth manufacturer, most of whom earned $350 to $450 a week, were irate when told at a creditors meeting in Newcastle that they would get 50 per cent of the termination and redundancy payments. The workers will get 100 per cent of their superannuation, long service pay, outstanding wages and sick leave entitlements, but will have to wait at least 18 months to get it. The federal Government proposals, approved in July by the Ministerial Council for Corporations, extend existing personal liabilities that apply if directors are found to be deliberately trading when insolvent. The Government will not backdate the tougher legal sanctions, after announcing this week a proposed $20,000 a head safety net scheme would apply from January 1. Mr Reith said yesterday it was appropriate to "put the ruler" over the collapse of companies to ensure directors had met their obligations. "And where they haven't, I think we should throw the book at them," he said. Opposition industrial relations spokesman Arch Bevis said laws giving workers the right to make a claim on the personal assets of directors would be a "strong incentive to ensure directors do not dip into employee funds". But National Textiles chairman Stan Howard - the Prime Minister's brother - scoffed at the idea. "Adopt a situation where directors are personally liable and you would have no directors," Mr Howard said after the Newcastle meeting. Subject to approval by the receiver, most of National Textiles plant and equipment will be sold to Bruck Textiles, a company that employs 500 people at Wangaratta, in Victoria. The remaining plant and equipment will be moved to National Textiles' sister company, Australian Weaving Mills, which is based at Devonport in Tasmania. "Hopefully, that will protect the 250 jobs in Devonport that otherwise may come under threat," said former National Textiles chief executive Derek Hodge, who will get $2000 of $300,000 owed him. But that meant little to father of two Daniel Ilic, who had worked 16 years for the company and who described the payout regime as "piss poor". The creditors meeting was told that the two main secured creditors - the Scottish Pacific Bank and Oldtex - would be paid out in full, receiving $6.5 million and $3.7 million respectively. But unsecured creditors such as Newcastle plumber John Phillips, who is owed $31,000, were told they would receive 5c in the dollar. Mr Phillips said he and other contractors had plainly been "taken for a ride". "They had contractors working out there just two to three days before they shut the business down," Mr Phillips said. "Somebody must have known they were going to pull the plug. I just don't think that is right." ************************************************************************* This posting is provided to the individual members of this group without permission from the copyright owner for purposes of criticism, comment, scholarship and research under the "fair use" provisions of the Federal copyright laws and it may not be distributed further without permission of the copyright owner, except for "fair use." -- Leftlink - Australia's Broad Left Mailing List mailto:[EMAIL PROTECTED] http://www.alexia.net.au/~www/mhutton/index.html Sponsored by Melbourne's New International Bookshop Subscribe: mailto:[EMAIL PROTECTED]?Body=subscribe%20leftlink Unsubscribe: mailto:[EMAIL PROTECTED]?Body=unsubscribe%20leftlink
