Ion job losses spark law reform call

Date: 30 March 2005

The Australian Workers' Union (AWU) is calling for corporate law reforms to protect workers from company failures after the loss of 400 jobs from the failed Ion auto parts plant at Wingfield in South Australia.

Around 60 workers at the engine parts plant in Adelaide lost their jobs today, with another 340 to be made redundant before the plant's closure on July 31. Ion still employs 300 other workers in South Australia at its Kilkenny and North Plympton plants, as well as 700 workers at its transmissions factory at Albury in New South Wales.

Speaking to workers at Ion's ongoing North Plympton plant in Adelaide today, AWU National Secretary Bill Shorten said the company's former management and banks failed to consult workers about their future livelihoods before Ion was put into voluntary administration last December.

"At Ion's last Annual General Meeting in October workers, shareholders and customers were told the company was in good shape. Two months later, the banks - which were happy to lend Ion $440 million a few months earlier - suddenly pulled the plug on the business."

"Companies should not be allowed to keep workers in the dark about their financial future especially when other stakeholders like banks are given privileged information. Workers who are owed entitlements are, in effect, forced to give their employers an interest-free loan. Workers investing in their company deserve access to full financial information."

Mr Shorten called on the Federal Government to change company laws to:

- require companies to make regular financial reports to workers and their union representatives, including on accrued and contingent employee entitlements;

- require companies to record the value of accrued and contingent liabilities for employee entitlements in their formal accounts;

- give workers maximum priority of payment (i.e. before banks) in creditors lists; and

- remove the eight-week cap on redundancy payments under the General Employee Entitlements and Redundancy Scheme (GEERS).

"The AWU has negotiated agreements with Ion's administrators to ensure workers are paid their full entitlements, despite the Howard Government's broken election promise from 2001 to give workers maximum priority of payment in company insolvencies," Mr Shorten said.

"The Howard Government's GEERS scheme continues to short-change thousands of retrenched workers because of the unfair and arbitrary limit on redundancy pay. Workers should be paid what they are owed, not what John Howard says they should be paid."

For further information

Contact:	Jeremy Vermeesch
Union:	The Australian Workers' Union
Phone:	03 8327 0888
Contact Mobile:	0431 942 977
Fax:	03 8327 0899
Email:	jeremy.vermeesch@awu.net.au
WWW:	http://www.awu.net.au

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