‘Strong case to act early’: 2800 axed Rivers, Millers, Katies staff granted pay reprieve

Nearly 3000 workers left out of a job from the collapse of clothing retailer Mosaic Brands have been granted fast-tracked access to unpaid wages and other entitlements through a last-resort government scheme.

Mosaic Brands, which operated several low-budget brands including Rivers, Millers, Katies, Noni B and more, slid into administration in late October. Attempts to find a suitable buyer for its brands have fallen over, resulting in the eventual closure of nearly 700 stores and the loss of 2800 jobs.

The federal government has granted access to the fair entitlement guarantee for 2800 axed workers of budget clothing retailer Mosaic Brands.

The SDA Union, representing retail workers, has been agitating the federal government to grant workers early access to the fair entitlement guarantee (FEG), a safety net scheme that helps terminated employees claim their rightful entitlements without waiting for the company to officially enter liquidation.

Many retrenched Mosaic staff across the nation have been out of a job and unpaid since October.

“We’re talking about a workforce that is mostly women, many of whom have families to support, are part-time, and none are highly paid. I think if you put that all together, that was for me why there was a strong case for us to act early,” Minister for Employment and Workplace Relations Murray Watt told this masthead.

Workplace Relations Minister Murray Watt, whose approval is required for early access to the FEG scheme.Credit: Alex Ellinghausen

Watt, who also granted the same fast-tracked access for terminated Rex Airlines workers after its collapse, said he had been lobbied about this issue by the SDA, individual women, and some members of parliament.

“It’s a large collapse, and it’s spread throughout the country. It impacts a lot of different communities … It’s likely they’re owed several thousand, maybe even more.”

The FEG is normally activated when a company is placed into liquidation, but this process may take months and in this case, as late as September, leaving workers out of pocket for longer.

Former employees will be able to claim up to 13 weeks of unpaid wages, annual leave, long service leave, up to five weeks of payment in lieu of notice, and up to four weeks of redundancy pay for every year of employment from the FEG.

SDA national secretary Gerard Dwyer.Credit: Dominic Lorrimer

Impacted staff are directed to apply online and must do so within 12 months. Once the FEG is activated, the government then becomes a priority creditor and has the right to recoup the sum that was paid out from what’s left of the liquidated company’s funds.

SDA Union national secretary Gerard Dwyer welcomed the decision and congratulated the government for intervening on behalf of workers.

“These are lower-paid workers who have already gone through a difficult time, and having to wait another six months for their entitlements is quite simply unfair,” Dwyer told this masthead.

He cautioned former employees against expectations that entitlements would land as early as next week, but said it would nonetheless be significantly earlier than it otherwise would have been in the liquidation process.

“It’s going to be a lot quicker than September. It’s sad to be talking about final payments. We would have all been happier to talk about ongoing jobs.”

All stores operated by Mosaic Brands will be shut down by mid-April, according to the failed retailer’s receivers and managers KPMG. About 320 stores across the country are still operating and will gradually shut down as stock is sold.

Mosaic Brands owes creditors at least $740 million, according to minutes from a November creditor’s meeting.

Creditors and employees have been told that KPMG receivers are “cautiously optimistic” employees will be paid in full, although the timing is unknown.

Meanwhile, creditors that are not employees shouldn’t hold their breath for their money back.

“There is not expected to be sufficient funds from the realisation of assets to pay amounts owed to secured creditors in full,” FTI Consulting administrator Vaughan Strawbridge said in a circular issued on February 17.

“This means there will not be any money to pay debts owed to unsecured creditors (which includes suppliers and landlords) for goods and services supplied before 28 October 2024,” he added.

Before Mosaic officially collapsed, suppliers came forward to this masthead last year to detail millions of dollars owed where Mosaic sold products in store and banked proceeds without paying for them. Chief executive Erica Berchtold attempted to enter negotiations with Mosaic’s global suppliers by asking them to accept terms where they would be paid as little as one-third of what they were owed.

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