FIFO retrenchment practices under scrutiny by FWC

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The Electrical Trades Union has launched a landmark industrial dispute against Kentz Australia over practices said to avoid paying redundant FIFO workers their final week of employment.

Last week the ETU lodged a complaint with the Fair Work Commission on behalf of 150 retrenched workers from the INPEX Ichthys project, who were denied their final week of pay by principal contractor Kentz.

The company employed a standard practice of giving notice to redundant workers on the day before their rostered week of unpaid leave, thereby avoiding paying each worker for a week in lieu of notice.

The union argued it was not permissible for Kentz to either attempt to have the period of notice run concurrently with a period of rest and recreation, or to reduce payment in lieu of notice because of a period of rest and recreation.

ETU NT organiser Paul Kirby said the practice was a common “loophole” in the oil and gas and broader FIFO construction industry.

“We don’t think it’s in the spirit of the agreement but (Kentz’s) position will obviously be different,” Kirby told NT News.

The collective proposed entitlements of the 150 workers is expected to be worth $1 million.

The ETU estimated that around 1500 workers at Ichthys have been retrenched in a way that avoided their employer paying out the final week of notice.

The case has been regarded as a test case which will set a precedent and have an effect across the entire FIFO industry in Australia if the commission finds in favour of the retrenched workers.

It is expected that Kentz will argue that the Fair Work Commission has no juristiction to arbitrate on the dispute as the workers are no longer employed.

ETU acting national secretary Michael Wright said the practice of notifying workers on the last day of a roster swing had become more common with the resources construction boom winding down.

“We are seeing workers who endure extremely difficult conditions now being denied the wages that are owed to them under the Fair Work Act,” Wright said.

“Contractors are looking to wring every dollar they can out of their workforce.

“This practice is underhanded and unethical, and we are determined that workers who are laid off from FIFO projects will be paid what they are owed.”

Wright said it was a matter of “fundamental decency” that workers who built infrastructure to enable the boom should not be mistreated as the market winds down.

Kentz Australia has declined to comment on the matter.