STATEMENT FROM TANDEM SPOKESPERSON:
Tandem was founded to improve the treatment of sub-contractors, in a sector where subcontracting was established 10 years earlier, with a focus on health and safety. The vast majority of sub-contractors were successful, which makes the failure of the business, caused in large part by the class action, all the more frustrating.
Shine Lawyers continue to make highly misleading and inaccurate claims, which Tandem strongly rejects. Shine’s opportunistic class action has been hanging over Tandem for more than two years and was a major reason why Tandem businesses had to be placed into Administration, putting hundreds of employees and subcontractors out of work and their livelihoods at risk. The Class Action was a clear barrier to restructuring borrowing arrangements, securing agreement to defer loan repayments, and progressing new clients.
Shine was told on multiple occasions that their pursuit of Class Action was putting the company in jeopardy. Shine ignored this advice and instead continued down a path that has helped destroy hundreds of jobs. Shine claims over 4,000 sub-contractors will miss their day in court, yet in March this year, after launching the class action 28 months before, Shine told the Court it had only one sub-contractor signed up, meaning 4,672 Tandem sub-contractors had not.
Documents presented in court also showed that Tandem sub-contractors as a whole were paid over $1.5 billion compared to the $900 million they would have been paid if they were employees paid award wages and entitlements i.e. they have been paid $642 million more than they would have received as employees. Shine’s senior counsel acknowledged in court that if subcontractors were found to be employees, then payments to subcontractors would need to be set-off against wages. That could have led to the vast majority of sub-contractors receiving nothing from the class action.
The fact is, Shine and Litigation Lending Services would have been the major financial beneficiaries from the class action if it was successful.
SHINE LAWYERS RESPONSE TO ABOVE TANDEM STATEMENT:
- The instructions we received and the claims made demonstrates that the system of work caused devastation for a substantial number of the contractors.
- The administrator’s report puts doubts over Tandem’s claims that the class action caused the failure of the company. In particular the report points to a large dividend of $31 million paid out by the company in FY18 as potentially being a major cause of the company’s liquidity problems. The administrator has also identified a number of irregularities with the company books and records which it is investigating. It is also investigating a number of potentially voidable transactions by the company.
- Just because the company doesn’t agree with the claims, it doesn't mean they are misleading. The company has failed to address the devastation that it’s system of work has caused its technicians, and now, the company has robbed contractors of their day in court by putting the company into administration. This could only indicate that the company thought it was at real risk of an adverse judgment. Regarding the company failure, please see administrators report and matters referred to in the comment above.
- Shine asked for evidence of the company’s financial position on numerous occasions which was not provided. The court requires such evidence for any class actions to be compromised or discontinued.
- All 4672 contractors are automatically included in the class action. Further, well over 1000 contractors registered for the class action. Despite the company’s best attempts to dissuade contractors from signing up and putting out negative media reports about the class action only 125 contractors opted out of the class action. This demonstrates the level of support for the class action amongst contractors.
- This is false and senior counsel never acknowledged such a thing nor did the court ever give a determination in this respect. The treatment of the monies paid to contractors by the company was a matter to be determined at trial.
- The major beneficiaries would have been the technicians. The claim was valued at over $400 million. Technicians have potentially been robbed of their employment entitlements by the actions of this company and its directors.
STATEMENT FROM MCGRATHNICOL IN RESPONSE:
“At a meeting held yesterday the creditors of Tandem Corp Pty Ltd and certain of its subsidiaries (“the Insolvent Companies”) appointed McGrathNicol Partners Keith Crawford and Matthew Caddy as Liquidators. Mr Crawford and Mr Caddy had previously been appointed Voluntary Administrators of the Insolvent Companies on 1 July 2021.
The Report to Creditors circulated prior to the meeting sets out the Administrators’ preliminary findings in relation to the causes of the failure of the Insolvent Companies and any potential claims from insolvent trading and/or other breaches of director duties. The Liquidators will continue to pursue these matters and will report their concluded findings to creditors and the Australian Securities and Investment Commission (ASIC) in due course. While a number of transactions of interest have been identified, the Liquidators’ investigations are at an early stage and it would be premature to pre-empt any outcomes at this time.”
STATEMENT FROM TELSTRA SPOKESPERSON:
We’ve made it clear to Tandem, as we do with all of our suppliers, that we expect them to do the right thing from both a moral and a legal perspective for all of their entities. This includes the administrators and managers doing their best to assist employees and subcontractors, including accessing any government support available for employees who had not been paid entitlements, and making sure subcontractors have been paid correctly. The rollout and completion of the NBN has had an impact across this industry, with the work volume we have been able to send to all of our field services suppliers steadily declining over a number of years.