The Guardian January 23, 2002


Another company gobbles worker entitlements

by Peter Mac

Mining company Hillgrove has sacked 90 of its NSW employees who now join 
the long list of workers robbed of superannuation and other legal 
entitlements as the company slides into bankruptcy.

The plug was pulled on Hillgrove by the board of Tronoh Mines, whose parent 
company, the Malaysia Mining Company earned $200 million last year, but has 
no legal obligation to pay the Hillgrove employees' entitlements.

The Federal Government has expressed its deep regrets for the plight of the 
Hillgrove workers, but has stopped short of forcing the company to pay 
employees their entitlements.

"Employers have an obligation to pay workers' entitlements", observed 
Federal Employment Minister Tony Abbott meekly.

Although the Government has stated that it would "stand in the employees' 
shoes and try to get [the Hillgrove employees'] money back", in reality the 
government is simply spending taxpayers' money to partially compensate 
employees. It will only pay a fraction of the outstanding $350 million (to 
a maximum of eight weeks wages, and no superannuation).

In reality the implied threat of legal action, even if acted upon, has 
virtually no chance of success under current legislation.

The theft of workers' entitlements during retrenchment is a common 
practice. The phenomenon of disappearing entitlements is similar to the 
former widespread theft of money from solicitors' trust funds.

This practice died back after the introduction of legislation requiring 
legal firms to immediately place funds entrusted to their care in secure 
investments to which the firms do not have access. 

However, in reality neither federal nor state governments have shown the 
slightest interest in legislation to protect workers' entitlements, and 
have actively opposed campaigns for the Australian Manufacturing Workers 
Union's "Manusafe" system of regular entitlement payments into a secure 
fund.

Hillgrove was the biggest single employer in the northern NSW Armidale 
area, and support companies also generated considerable employment 
opportunities. The sackings will deal a huge blow to the local community.

A receiver has been appointed, and the company's operations are to continue 
ticking over with a skeleton staff.

The company had been making consistent losses, but the planned construction 
of a new antimony plant later this year was expected to turn the mine into 
a major profit maker.

However, in May last year, Tronoh Mines acquired a major shareholding in 
the company, in a deal which gave it total ownership of the rights and 
property of the mine.

It would appear that for Tronoh's backers the immediate opportunity to help 
itself to the mine's assets and the employees entitlements simply 
outweighed the long-term benefits of paying for a more productive 
enterprise.

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