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Australian PM urges media tycoons to pay workers of failed telecoms firm
( 2001-06-04 14:25 ) (7 )

Australian Prime Minister John Howard Monday urged all major investors in insolvent telecoms company One.Tel, including media giants News Corp and PBL, to guarantee its workers' entitlements.

Howard also joined the call for One.Tel founders Jodee Rich and Brad Keeling to refund bonuses totalling 13.8 million dollars (seven million US) they paid themselves while the company was slipping into financial strife last year.

Australia's fourth largest telecoms carrier is struggling to avoid collapse after being placed in administration last week, exposing Rupert Murdoch's News Corp and Kerry Packer's PBL to losses of up to one billion dollars.

Its major shareholders are the tycoons' sons, James Packer and Lachlan Murdoch, who jointly injected 909 million dollars into the company in February 1999.

The Community and Public Sector Union (CPSU), which covers One.Tel's 1,400 employees, on Monday began legal action in the industrial relations tribunal to secure redundancy entitlements worth up to 25 million dollars if the company is forced into liquidation.

Both the Australian government and the New South Wales state government said they would intervene in the action to try to ensure the workers get their entitlements.

"I just hope sufficient money comes from somewhere to cover the entitlements of these workers," Howard told reporters.

"I think everybody who's been involved in this company have a moral obligation to see the workers helped out, that's my position. Everybody who's involved with it."

Howard said the reputations of Rich and Keeling would be forever tarnished if they did not guarantee their workers' entitlements.

"I would very strongly counsel Mr. Rich and Mr. Keeling to think, if nothing else of their future reputations not only in the city of Sydney but in the business community of Australia.

"They have a very strong moral obligation to pay that money money back."

Howard said it was clear from One.Tel's financial collapse that the bonuses were not warranted and the government would now change the laws to make it easier for future bonuses to be recalled.