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Labour hire firm ordered to pay workers withheld entitlements after going bust

SubZero Group
SubZero Group

An outsourcing company will have to remunerate retrenched coal mine employees for additional payments they are still owed.

The Federal Court recently ordered the now defunct SubZero Group to pay redundant workers 25 per cent casual loading for all hours worked.

The decision came after multiple staff members complained that the labour hire firm had allegedly declared them to be permanent while, at the same time, having them perform contract work on a fixed hourly rate.

SubZero went into receivership back in 2016 and entered liquidation three years later. Affected employees also claimed they were denied access to entitlements despite the Fair Entitlements Guarantee (FEG) scheme, because the FEG decided they were permanent and not casual workers.

‘Shameful’ permanent casual ‘rort’

The Construction, Forestry, Maritime, Mining and Energy Union (CFMEU) successfully argued that workers cannot be considered permanent and were actually employed on a casual basis. The court agreed and ruled the staff members should have been paid casual loading in the first place.

CFMEU described the entire ordeal as a classic example of the “shameful ‘permanent casual’ labour hire rort”.

“The courts have been loud and clear: In Australia, if you work somewhere permanently and predictably, then you are a permanent,” CFMEU Mining and Energy northern district president Peter Jordan said in a public statement.

“That entitles you to a package of rights and conditions. Employers cannot label you as a casual to strip you of those rights.”

Up to $20,000+ recovered

Jordan revealed former SubZero employees were excited about receiving up to tens of thousands of dollars in outstanding wages.

“It is a fantastic victory for these mine workers who are now going to be tens of thousands of dollars better off on average, and we have also established a precedent that will apply to future labour hire companies that go into insolvency,” he said.

“This Federal Court victory follows on from our landmark Skene and Rossato victories that found the ‘permanent casual’ labour hire rort to be invalid … [and] any decent Australian Government would now recognise the legal position, recognise the moral position, and tell employers the gig is up.”

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He believes the labour hire firm did not really need to withhold casual worker entitlements.

“Mining companies in Australia can continue to make extremely healthy profits without resorting to these mean and tricky games,” he said.

“There is no justification for their rort aside from base greed.”

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