Hastie Stands Down 2,700 Workers Without Pay for 28 Days
The fears of hundreds of layoffs as a result of the financial collapse of the Hastie Group moved a step closer as the company stood down on Tuesday morning 2,700 workers.
The employees were asked through a text message to attend a morning meeting in which they were informed that they will not be paid at least for the next 28 days. However, the threat of becoming jobless is not a remote possibility considering that the group’s collapse was described as one of the biggest corporate disasters in Australia since the 2008 global financial crisis.
This early, lenders to Hastie Group have been warned they have little chances of clawing back their money. Ian Carson, PPB Advisory chairman of partners, disclosed that virtually every bank in Australia is financially involved in the collapsed firm.
Besides job losses expected to affect at least 2,500 out of a total 4,000 workers, Hastie Group owes $503 million in loans and guarantees which would wipe about $300 million from profits of major Aussie banks and hit the wealth of some of the country’s wealthiest families.
The 2,700 Hastie employees were texted by staff from administrator PPB Advisory and receiver McGrathNicol which were appointed Monday morning to oversee what remains of the engineering services company. All 44 Australian entities of the group were placed under administration.
Being stood down for 28 days means the employees could not access unemployment benefits or redundancy funds since they are still employed during that period. Dean Mighell, Victoria state secretary of the Electrical Trades Union, explained that the 28-day process is something that Hastie workers have to go through, but at the end of that period in which they would not receive any compensation, they would likely be terminated.
“The administrator has committed an act or corporate bastardry to our members at Watters by keeping them notionally employed but in reality having them stood down without pay,” he said in a statement.
Mr Mighell said the union will challenge the administrator’s decision at Fair Work Australia. He also met with about 300 workers at the company’s North Melbourne site on Tuesday morning to find their circumstances and prospects of being re-employed.
The administrator said it is doing its best to retain the maximum number of workers possible.
Hastie Chief Executive Bill Wild, who headed the engineering firm only in October 2011, apologised to the employees for the company’s failure.
“I wanted to tell the staff and workers it’s not their fault. They worked long and hard for this company and their management let them down. Most of this workforce will ultimately find work… but there are going to be a lot of dark days for many families,” Mr Wild told BusinessDay.
Workplace Relations Minister Bill Shorten said he has spoken to the administrator and hoped a lot of the stood down workers would be able to return to their jobs. He said the company would have to be placed in liquidation for the federal government to be able to provide financial assistance to workers to be declared redundant.