Palmer rebuffed by administrator: no funds to pay workers’ dues

Administrators say they aren’t to blame for the failure to pay out Clive Palmer’s 237 sacked nickel workers.

‘The fact is Queensland Nickel did not have the money to discharge the ­entitlements,’ QNI administrator John Park. Picture: Evan Morgan

The administrators hand-picked by Clive Palmer to rescue his troubled nickel refinery have hit back at the MP’s claims they are to blame for failing to pay 237 sacked workers their redundancy entitlements.

In an interview with The Australian, FTI Consulting’s John Park said there was not enough money in Queensland Nickel’s coffers for administrators to pay the $16 million owing in redundancy ­entitlements.

“The cash flow at the ­commencement of administration was certainly not sufficient for the administrators to discharge (the entitlements of redundant workers),” Mr Park said.

“It would have been our clear desire to do that immediately but the fact is Queensland Nickel did not have the money to discharge the ­entitlements.”

FTI Consulting was appointed as voluntary administrators to the Townsville refinery’s operating company, Queensland Nickel Pty Ltd, on January 18. The appointment came just one business day after QNI’s sole director Clive Mensink, Mr Palmer’s nephew, sacked 237 workers. Some veteran employees are owed more than $300,000 in entitlements.

QNI collapsed into administration owing in excess of $100m: $16m to redundant workers, about $14m in entitlements to the 550 continuing staff, $20m to rail company Aurizon, another $50m to other unsecured trade creditors, and about $2.6m to Mr Palmer for paying workers’ Christmas wages.

When Mr Park and his FTI ­colleagues took over management of the operation, they quickly ­realised the company did not have enough cash to pay the sacked workers’ entitlements.

But Mr Palmer has repeatedly deflected criticism of himself, as sole shareholder and possible shadow director, and QNI ­management, for donating more than $21m from QNI to his Palmer United Party since 2013. More than $288,000 was donated in the second half of last year.

He has not accepted any blame or responsibility for ex-workers being denied their entitlements.

“The administrator was ­appointed on the Monday and he made the decision on the Wednesday not to pay their entitlements and put them in a deed of arrangement,” Mr Palmer told ABC’s Lateline last week. “That wasn’t my decision; it wasn’t Mr Mensink’s decision. We had no power or no control over it. There was nothing we could do about it.”

The MP for the federal seat of Fairfax told the Nine Network’s Today on Friday: “The administrator made the decision he wasn’t going to pay the entitlements, not me, not anybody else”.

In a letter to Malcolm Turnbull last week, Mr Palmer again said the administrators were respons­ible for deciding entitlements would not be paid.

“Neither the shareholders nor the management had any ­decision-making powers over such matters and it is therefore very unreasonable for there to be any attack politically on the management of the company pending the outcome of the administrators’ report,” Mr Palmer wrote. He did not respond to questions from The Australian yesterday.

QNI needs a cash injection of tens of millions of dollars if it is to avoid slipping into liquidation as early as April 30.

If QNI does fail, taxpayers will foot the bill for workers’ entitlements, through the federal Fair Entitlements Guarantee.

However, the process is a time-­consum­ing one and will not fully compensate every worker, partic­ularly long-serving employees, as the amount available is capped.

The fate of the company will be decided at the next creditors’ meeting, where the administrators will deliver a report dissecting QNI’s finances and giving an ­opinion about whether any director­, former director or shadow­ director had breached corporations law.