The Guardian August 8, 2001

End the entitlements rip-off!

Andrew Jackson 

Australia-wide, manufacturing workers are demanding an end to the rip-offs 
and rorts used by employers to cheat them of their rightful entitlements. 
They are now fighting for the introduction of Manusafe, a union-backed 
institution to safeguard their futures.

In Adelaide, 359 Tristar workers have gone on strike demanding that 
Manusafe be included in their enterprise bargaining agreement. 

With an uncertain future facing the Australian car manufacturing industry, 
the workers are demanding their entitlements be safeguarded against future 

Another 800 workers in Adelaide went on strike at Electrolux, over the 
company's refusal to negotiate on the issue. 

At Maintrain in Sydney, 210 workers went on out on a strike in which 
Manusafe is a central issue. For over four weeks the Maintrain workers have 
been willing to sacrifice short-term wage losses in the fight for long-term 

In recent years the NSW Government has outsourced the maintenance of its 
State Rail trains to Maintrain, a subsidiary of Goninans. This means that 
although they are providing a service for the Government, the workers do 
not have the security of government employment, and are at the mercy of the 
private sector. 

End the rip-off!

Onetel, HIH, Steel Tank and Pipe and National Textiles are only a few very 
public examples of the hundreds of cases each year where companies are 
managed into insolvency, with the workers left being owed millions. 

Every year, more than $400 million of employee entitlements are lost due to 
corporate bankruptcies, fraud and mismanagement. 

Owners, directors and managers pay themselves multi-million dollar annual 
bonuses, and then wind up the company when the coffers are bare. 

Complex corporate structures are set up so that workers are separated from 
their entitlements. 

Corporations use "shelf" companies that have no assets to employ their 
workers. This allows the parent company to pocket profits, while should 
they choose to sack the workers, there is technically not a cent to pay 

Companies claim bankruptcy here in Australia, but start up replica 
operations overseas to profit from lower wages. 

The workers have had enough, and are using nation-wide industrial action to 
force employers to pay their entitlements into Manusafe, a secure fund to 
protect workers' benefits as they accrue. 

How does Manusafe work?

Each month, employers will be required to contribute to Manusafe, on behalf 
of each worker, an amount of money that will guarantee enough to cover that 
worker's annual leave, sick leave, long service leave and severance pay. 

The amount paid in for each employee will vary depending on: the worker's 
base rate of pay and the amount of benefit awarded (such as leave loading), 
as varies from workplace to workplace. 

Claims against the fund are made when the worker's benefits fall due. The 
employer will initially pay the employee and then claim reimbursement from 
the Manusafe fund. 

If the business is taken-over or sold, the employer must have all 
entitlements fully paid up by the date of sale. 

New benefits for employees 

The immediate benefit is that all workers will have a rock-solid guarantee 
of being paid their entitlements when due. 

Manusafe will also bring a new benefit to workers  portability of 
entitlements. This means workers will not lose, or be forced to cash in 
accrued benefits when they move from one employer to another. 

Thus a worker will be able to take long-service leave after 10 years of 
work in the manufacturing industry, regardless of whether it has been 
served with one, or several employers. 

If a worker with a Manusafe account starts work with a non-Manusafe 
employer, the entitlements will still not be lost. Sickness, long-service 
leave, and other entitlements that would not be paid on termination will be 
held over until they move to a new Manusafe employer, or the current 
employer signs up with Manusafe. 

Industry benefits 

Employers will reap the benefit of reduced administration costs, as 
Manusafe has the potential to take over much of the payroll administration 
now carried out by companies, just as superannuation funds do now. 

Manusafe does not charge the company administration fees; the costs will be 
covered by the surplus created from interest and investments. 

Manusafe is dedicated not only to the preservation of workers' 
entitlements, but also to the preservation of industry in Australia. 
Manusafe will use surplus funds to invest in Australian manufacturing, thus 
helping the long-term survival of our industries. 

Who manages Manusafe? 

The unions currently working together to establish Manusafe are: AMWU 
(Australian Manufacturing Workers' Union); CEPU (Communications; Electrical 
and Plumbing Union); AWU (Australian Workers Union); LHMU (Liquor 
Hospitality and Miscellaneous Workers' Union); CFMEU (Construction Forestry 
Mining and Energy Union); and the TCFUA (Textile Clothing and Footwear 
Union of Australia). 

Yet, contrary to spurious claims by Industrial Relations Minster Tony 
Abbott and the (employers') Australian Industry Group, this scheme in no-
way is used to benefit the unions. 

All monies in Manusafe will be subject to strict controls and the 
supervision of a board of trustees comprised of both union representatives 
"and employer groups". Yet the employers have so far refused to take up the 
half of the board positions offered to them. 

All surplus funds will be used solely for the benefit of fund members  
the employers and workers  and not for profit. 

Misinformation campaign 

Employers are waging a misinformation campaign designed to destroy Manusafe 
at the outset and discredit the unions. 

They claim that Manusafe is too costly and will burden them with new 
charges and cause them cash-flow problems. 

Firstly, It must be remembered that employers should already be putting 
cash aside to cover their workers' annual, sickness and long-service leave 

The only difference now is that as workers' entitlements accrue, the 
employer will use them to benefit the workers, and not as an unsecured, in-
house, interest-free loan. 

The Manusafe scheme also requires the employer to pay an extra contribution 
equal to 1.5 per cent of the employee's wage. This guarantees additional 
funds to cover workers made redundant by company bankruptcies or 

Companies claim they shouldn't have to pay this, as it might never be 
needed. Yet hundreds of thousands of workers have suffered redundancies for 
these reasons of the last decade. Over 70,000 jobs have disappeared 
completely since 1994. 

Because of the employer-induced casualisation of the Australian workforce 
of the past decade, hundreds of thousands of workers now receive an 
additional 20 per cent on their base rate of pay  in part to compensate 
for the lack of job security. 

At the cost of only 1.5 per cent, employers can now offer their full-time 
employees the same protection against future uncertainty. 

Manusafe  a future set in concrete 

Labour's employment spokesperson, Cheryl Kernot, has come out in support of 
the striking workers, but stopped short of endorsing the Manusafe scheme. 

Kim Beazley has promised that a Labor Government will protect all 
Australian workers' entitlements by adding a 0.1 per cent surcharge onto 
employers' existing Superannuation Guarantee payments. 

Yet Labour's promise is precarious at best. Firstly, a Labour win at the 
next Federal Election is not set in concrete. 

Should manufacturing workers, who are currently negotiating enterprise 
bargaining agreements forgo, Manusafe on the promise of a party not in 

Perhaps not, especially given that retrenched workers were given no 
protection during the 13 years of the previous Labor administration, a time 
when massive economic restructuring took place. 

And with Labor enjoying millions of dollars in corporate sponsorship these 
days, they might find it difficult, once in office, to enforce on their 
big-business mates any scheme designed to benefit workers. 

Chris White, Secretary of the United Trades and Labor Council of South 
Australia says, "The failure of the government to introduce a national 
scheme has led to unions in the manufacturing sector to campaign for this 
entirely reasonable and fair Trust scheme". 

"These are workers' entitlements and they deserve to be protected from 
incompetent or unscrupulous employers, and from the workings of the boom-
bust cycle."

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