NOT paying bills and doing things “on the cheap” was the modus operandi of Rutherford waste-oil refinery Truegain.
So it comes as no surprise to former workers of the company, also known as Australian Waste Oil Refineries (AWOR), that two years after its collapse they are still out in the cold. The money they are owed – wages, holiday pay, superannuation, long service and termination payments – they will never see.
Some workers told the Newcastle Herald they were owed more than $100,000, a lot to people struggling to support families, pay mortgages and save for retirements. Some are still looking for work.
Liquidator Jamieson Louittit and Associates’ latest reports, dated September and July, reveal the two companies owe more than $5.79 million and have $100,410 in the bank. This includes the $1.385 million that workers were left out of pocket, some of which is now owed to the Federal Government after it was forced to pick up a portion of the tab under its Fair Entitlement Guarantee Scheme (FEG), designed to assist workers who lose their jobs due to employer liquidation or bankruptcy.
The most likely, or worst case, scenario for workers still owed is that they will get nothing.
When the companies were placed in liquidation in September 2016, employees said it came as no surprise when they learnt from the liquidator that the cupboard was bare; there were not enough assets to cover the massive debts.
The organisation has recycled a range of materials at its Kyle Street, Rutherford, site since the 1990s and was made up of two companies – Truegain dealt with contaminated water, while AWOR handled waste oil and processed fuel.
The organisation’s atrocious environmental record, exposed by a Newcastle Herald investigation, included oil and liquid waste dumping into surrounding waterways and properties dating back decades.
Unpaid superannuation was a common theme among many employees. Workers said their payslips indicated super was being paid, but when they checked their funds, no contributions were being made.
Former Truegain supervisor John Necovski was one of several workers who called the tax office to report non-payment of superannuation.
“Once I found out it wasn’t being paid I went straight through the tax office,” he said. “They were forced to sort it out, but I was one of the lucky ones.”
Mr Necovski detailed a lack of spending on equipment, maintenance and safety during his time with the company and said the purse strings remained just as tight after the company wound up.
Angry workers said the company should have been “cashed up” because it sold a portion of its oil business to a rival in the months before going into liquidation.
After two years of waiting, former employee Phil Towers’ assessment is blunt. “It absolutely stinks,” the 61-year-old said. “So many people are still owed so much money. I know one guy who is owed eight or 10 years super, he’ll never see it and it’s just not right.”
Former worker Brad Smith said people who could find other jobs got out quickly once they realised what was going on.
“You could never get paid on time, they were always scratching for dollars,” he said. “They didn’t pay me over Christmas once, I ended up getting paid after New Years. I was waiting for the pay to go on holidays … one of the managers had to get some cash out of his own account.”
Workers described the liquidator’s report as a “depressing annual reminder” in the mail of what they’ll “never get”.
According to the report, when the company folded creditors were owed more than $8 million, there was no cash in the bank and the majority of plant was worthless.
The liquidator said the company “appeared to highly over-estimate” the value of its plant, equipment and property. The “book value” of plant and equipment was listed as $10 million, but the liquidator estimated it had no value.
National Australia Bank, the largest secured creditor, was paid $2.3 million following the sale of the company’s St Marys industrial yard, a property at Orange, motor vehicles and equipment. According to the liquidator, the business failed due to “poor strategic management”, outstanding taxes, high capital costs and insufficient cash flow.
AWOR was officially wound up in July with debts of more than $1 million. This included $403,085 owed to 47 priority creditors or employees and $668,645 owed to 10 unsecured creditors.
Truegain’s liquidation is expected to be completed by April next year.
The company has $100,410 in the bank, some of which will end up in the liquidator’s coffers.
It owes 241 creditors $4.7 million, including $982,779 owed to 38 priority creditors or employees, $997,974 owed to 50 secured creditors and $2.7 million owed to 153 unsecured creditors.
Jamieson Louttit and Associates has been paid $287,663 to September for the Truegain liquidation and $14,093 for the AWOR liquidation.
The liquidator did not return several calls from the Herald.