SOUTH Nowra call centre operators Norm and Judy Potter have been ordered to pay fines and back pay to staff of more than $300,000.
The findings, imposed in the Federal Magistrates Court in Sydney on Friday, were the result of a prosecution by the Fair Work Ombudsman.
The Potters own the Well Done Group and previously owned another call centre called Quincolli.
The Potters were fined $107,500 and ordered to back pay almost $200,000 to staff.
Last year, the Potters appealed the findings but on Friday, after five years of investigations and court hearings, the judge upheld most of the original findings.
The court found Quincolli underpaid 33 casual employees in 2009.
Creditor Kane Wilkins said he felt vindicated after what he called a David and Goliath battle.
But while there has been a moral win for those who were underpaid, receiving the money owed to them could be another matter.
Last year, Quincolli was placed under administration.
Mr Wilkins said the liquidator had identified many resources and assets Quincolli and the Well Done Group owned that could be sold to get the money.
“They’ve had their time in court, the game’s up,” Mr Wilkins said.
“Now the debt has been proven, the insolvency agency can commence recovery with the assistance of [the Australian Securities and Investments Commission].
“People need to be paid for the work they performed.
“The insolvency agency was requested to examine superannuation variation during that period. I expect there will be a massive superannuation payout.”
Mr Wilkins is a member of the Creditors Committee of Inspection established to help examine the financial records, functions and activities of the company to assist the liquidation agency.
He said the committee of inspection had been presented with evidence of “phoenixing”, which it had passed to the insolvency agency.
From page 1
“We will request the insolvency agency contact ASIC and request additional recourses to forensically investigate the company for phoenixing,” he said.
United Services Union organiser Rudi Oppitz said the focus now would turn to action by the insolvency agency to recover the money.
“It’s been a long, long haul for all concerned,” he said.
“There has been a lot of money spent to get to Friday’s decision and a lot of man hours from the union.
“Now it’s time for the directors to step up and pay these entitlements to the employees.
“The Potters have been able to shift their businesses under different names and continue to trade.
“The issue we have now is during these proceedings insolvency agents were appointed, so now it’s an issue with the insolvency agency to run its course to what they can recover from these businesses.
“It’s been a long haul and during that period there’s been some alterations to the business where employees have been moved from the original company and as we understand assets have also been moved.
“This will now be the focus of the insolvency agent who will look very closely at the actions of the directors to ascertain what, if any funds they can recover in order to pay the employees.
“The directors, now having run every avenue through the Federal Court, should pay these former employees because it’s been definitively determined the money is owed.”
Mr Oppitz said during this period under litigation the advent of new business entities had occurred.
“Our understanding of the legislation suggests the manner in which these entities arose could be classed as phoenixing.
“It was always an important case to run for the employees but also in principle in ensuring awards were being honoured by employers.
“An interesting issue arose out of this regarding other call centres.
“Call centre owners were contacting the union stating they had lost business to the Well Done Group who were undercutting them.
“So this is an important judgment for the industry.”
The Potters did not return the Register’s calls.
Phoenixes cost $3bn
A PHOENIX company is a commercial entity which has emerged from the collapse of another through insolvency. The new company is set up to trade in the same or similar trading activities as the former, and is able to present the appearance of business as usual to its customers.
According to the Australian Securities and Investments Commission “phoenixing” costs the Australian economy more than $3 billion per year.
Employees are robbed of wages and entitlements and creditors, many of whom are small businesses, are left behind with debts.
There are also significant unpaid tax liabilities which have a detrimental impact on tax revenue.