A firm designed to recruit members for unions has been placed in liquidation with more than $4 million in debt, the second collapse of its kind within just one week, suggesting some sectors of the recruitment market are struggling to keep up.
The liquidation of Unions National, which traded as Work Partners, comes after family-owned business Extrastaff Recruitment was placed into administration last week.
Work Partners appeared on the SmartCompany Start-Up awards in 2009, with revenue of $1.4 million. The company, which acts as an outsourced recruitment firm for unions to find new members, is led by ex-ALP activist Stuart McGill who was contacted but unavailable this morning.
Liquidator Michael Royal of BIR Solutions was also contacted this morning, but was unavailable prior to publication.
However, Royal has told The Australian that Work Partners was wound up after admitting it may not be able to pay its debts, which total $4 million, with super entitlements and wages reportedly owed to current and former employees.
“The return to employees of unpaid superannuation will largely be dependent on what the unions owed to the company,” he said.
Work Partners has had a troubled year. Earlier this year it was reported that its relationship with the Australian Council of Trade Unions had soured over alleged unpaid entitlements.
It is understood that the business will be put up for sale and that a creditors meeting has been scheduled for next week.
The collapse comes as Extrastaff was put into administration last week, despite the founders pledging to grow the company into a national network.
Andrew Northcott, founder and chief executive of recruitment firm Labour Solutions Australia, says the industry is currently undergoing a shift whereby some sectors are performing better than others.
“I think some of the sectors that our company focuses on, such as mining and agriculture, are going very well. But if you look at other sectors, particularly the traditional labour for hire sector and so on, those sectors have slowed down a lot.”
Northcott says some sectors, especially the construction and engineering areas, are hurting badly.
“Build and civil construction – those sectors have definitely slowed down a lot. The multi-tiered economy is definitely coming through now, and traditional recruitment and labour for hire players aren’t doing well.”
Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
