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Worker entitlements unpaid after Tasmanian firm's collapse: union

Saturday, 24 Sep 2016 09:17:47 | Ted O'Connor

Communications cabling generic image. (www.russell-smith.com.au)

A Tasmanian communications and electrical company has racked-up more than a million dollars in debt and owes workers hundreds of thousands of dollars in entitlements after forming two years ago, according to the union representing its workers.

Russell Smith, which describes itself on its website as "Unquestionably Tasmania's leading electrical and communications contractor", formed out of the ashes of Russell Smith PSG, which went bust in 2014.

It has now declared insolvency.

Communications Electrical and Plumbing Union state organiser Mick Anderson said since then, employee numbers had dropped from about 180 to 20 owing to redundancies and mass resignations.

"They've held debt of employee entitlements of over a couple hundred thousand dollars," he said.

"We also know they owe electrical wholesalers over a million dollars in Tassie and to rack-up the debt in under two years is pretty impressive."

Mr Anderson said it "looks to me sheer incompetence, to be honest".

Until recently, the contractor had been involved in major projects around the state including the University of Tasmania's National Rental Affordability Scheme apartments in the Hobart CBD.

"They did hold until quite recently five or six major projects around Tasmania and the builders have recently made decisions to move them off those projects," Mr Anderson said.

Federal 'safety net' will help workers: partner

Sydney-based insolvency firm Jirsch Sutherland has been appointed to do a report on the company's finances and make recommendations.

A partner from the firm, Stuart Free, said it was too early to speculate what led to Russell Smith's demise.

"We don't know anything at the moment other than the directors believe the company is insolvent," he said.

He assured out-of-pocket staff they would receive compensation.

"There will always be some entitlements unpaid; we don't know what that is at the moment, we're just getting our heads around the financial affairs," he said.

"They will be recovered regardless by the Federal Government's safety net."

Russell Smith has offices in Hobart, Launceston, Burnie and Devonport.

A creditors meeting is expected to be held within the next ten days.

When contacted by the ABC, Russell Smith declined to comment.

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