Foreign cleaners miss payouts in Swan collapse

Thousands of low-paid employees of collapsed cleaning company Swan Services will miss out on unpaid entitlements because they are foreigners, administrators say.

Thousands of low-paid employees of collapsed cleaning company Swan Services will miss out on unpaid entitlements because they are foreigners, administrators say.

Swan Services collapsed last week and is likely to be liquidated. It owes $1.6 million to its 2466 employees for wages alone. Its workers were said to earn $17 an hour cleaning shopping centres and $21 an hour in office buildings.

Many have found work with different contractors, but Michael Crosby, president of the United Voice union, said they were owed two weeks' pay, leave and leave loading, and superannuation from March onwards.

Swan Services owes a further $2.7 million to creditors such as cleaning product suppliers. The bill for government creditors, primarily the Tax Office, is yet to be determined.

Administrator Anthony Elkerton, from Pitcher Partners, said the employee entitlements comprised an "unusually high percentage" of Swan's debt, reflecting the labour intensity of the cleaning industry.

He estimated that only 30-35 per cent of Swan's workers would be eligible for the Fair Entitlements Guarantee, a taxpayer-funded scheme that covers unpaid wages, annual leave and redundancy entitlements of workers whose employer has gone bankrupt or into liquidation until money can be retrieved by insolvency.

Only Australian citizens or holders of a permanent visa or a special category visa are eligible for the scheme. Mr Elkerton said it was "too early to predict a return to creditors".

The collapse of the 47-year-old business has been blamed on unprofitable contracts, a computer glitch and a delay in receiving payments worth an estimated $2.5 million from customers. Mr Elkerton said the payment of any employee entitlements would "rely heavily on debtor collection rather than asset sales".

The comments come as economists tip a rise in the national unemployment rate to 6 per cent by the end of 2013, and as the cost of the Fair Entitlements Guarantee is budgeted to cost $304 million this financial year.

Employment and Workplace Relations Minister Bill Shorten said the guarantee scheme, formerly known as GEERS when introduced by then workplace minister Tony Abbott, put the government in workers' shoes.

Mr Shorten told Fairfax Media last week the government "would like to see more recoveries".

"Clearly we view recovery as an important part of GEERS. We'd like to see that number increase; we'd like to have better-run companies," he said.

Asked whether there was evidence that companies were increasingly collapsing with little money for entitlements knowing the taxpayer would pick up the tab, he said: "No, I talk on a regular basis to insolvency practitioners, and I've had no advice to that effect from the department either."

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