WA company collapse 'next in the race to the bottom' of construction industry: union

We’re sorry, this feature is currently unavailable. We’re working to restore it. Please try again later.

Advertisement

This was published 4 years ago

WA company collapse 'next in the race to the bottom' of construction industry: union

By Hamish Hastie

The Electrical Trades Union has described the collapse of a big Perth construction contractor on Thursday as the next in the race to the bottom of the construction sector.

About 400 staff were temporarily stood down on Thursday with up to two weeks pay owing after administrators were appointed to Henderson-based construction and maintenance contractor ECM.

ECM's Henderson office.

ECM's Henderson office.Credit: ECM

Documents were lodged with ASIC on Thursday that Clint Joseph and Martin Jones from auditors KPMG had been appointed to administer the company.

It is understood ECM employed about 400 staff, mostly in WA, as well as a handful in Queensland and South Australia.

ETU WA secretary Peter Carter said the company's pay day was yesterday and most staff were owed between one and two weeks pay plus entitlements.

He said ECM's collapse was the next in a line of about 30 electrical contracting businesses forced to the wall in the past six years because of a 'race to the bottom' business model forcing businesses to cut tenders to the bone.

"This has left up to 400 workers on the social scrap heap," he said.

"They are very concerned and confused they have to tell their families they don’t have a job now."

KPMG confirmed "all employees" had been temporarily stood down as negotiations begun.

Advertisement

“We very much appreciate the distress this news has caused employees and others. As such, the administrators have commenced an urgent and immediate assessment of the business and the options available," Mr Joseph said.

Loading

“Today is day one of a process, so there are many questions yet to be answered. First and critically, we must secure the ongoing support of the company’s key clients and other stakeholders in order to secure a future for the business.

“Rest assured, we will update employees and stakeholders as soon as we have a clearer picture of the situation and options."

ECM was started in 1986 and grew to become one of the WA's biggest electrical and instrumentation contractors.

It is subcontracted by WA construction firm Doric for $45 million worth of electric works on the Department of Defence's $367 million HMAS Stirling redevelopment project on Garden Island, scheduled for completion by March 2020.

ECM was also recently involved in the Tianqi Kwinana lithium hydroxide processing plant project.

ECM has also completed hundreds of millions of dollars of work for major miners such as Roy Hill and WA's grain handling co-operative CBH.

Calls to head office went to its message bank.

Doric were contacted for comment.

Most Viewed in Business

Loading