Oz agency pursues payments in NZ court

New Image Group deputy chairman Alan Stewart. Photo / Supplied

An Australian government agency that campaigns for fair working conditions has filed proceedings in New Zealand for the first time under a cross-border insolvency law in a bid to get $784,000 returned to employees of a liquidated company.

The Fair Work Ombudsman announced yesterday it had filed proceedings at the High Court at Auckland under a law that allows information on insolvency to be shared between Australia and New Zealand.

The regulator has taken action against New Image, the parent of Omegatrend, a company that collapsed in July 2007 owing 14 Perth-based employees $784,000 in unpaid entitlements.

New Image said it was disappointed the agency had gone to the media before a crisis meeting at the High Court at Auckland later this week.

The closed meeting will be held to discuss the financial affairs of Omegatrend while under New Image ownership.

New Image Group deputy chairman Alan Stewart said the company had been co-operating with the lawyers of Omegatrend's liquidator.

Stewart said shareholders were aware of the dispute and the board had said in the group's 2010 annual report that the dispute had no foundation.

New Image, a listed company on the New Zealand Stock Exchange, specialises in manufacturing and marketing health and nutritional supplements.

Omegatrend was a direct marketing company that sold health food products.

New Image claims to be one of the world's leading suppliers of colostrum products. It has offices throughout Asia and its head office is in Mangere Bridge, Auckland.

It closed the Perth office of Omegatrend in January 2007, making all its staff redundant.

At the time, New Image agreed to pay out the outstanding entitlements for annual and long service leave in fortnightly instalments. But in April employees were informed that no further payments would be paid.

Fair Work Ombudsman executive director Michael Campbell said the regulator's decision to pursue New Image was an important demonstration of the lengths the agency would go to to bring about wage justice for Australians.

"When it is appropriate to do so, the Fair Work Ombudsman will not shy away from pursuing these matters in overseas jurisdictions if the legal regime exists to do so and there is some reasonable hope of recovering unpaid entitlements."

Campbell said court orders would allow the liquidator in Australia, Ferrier Hodgson, to examine company documents and to interview New Image directors Graeme Glegg, Bill Cunliffe, chief executive Stephen Lyttelton and Stewart.

The court orders also allow the liquidator to interview former Omegatrend employees and New Image current and former directors on the collapse of Omegatrend.

It is alleged New Image bought Omegatrend's assets during the liquidation process for below market value, which left the company with no means to meet its commitments.

Campbell said the former employees of Omegatrend had already filed proceedings at the Western Australian Supreme Court in a bid to get their money.

He added that the agency had decided to support the employees and assist the liquidator's investigation into New Image's acquisition of Omegatrend.

"Despite repeated attempts by the Fair Work Ombudsman and the liquidator to resolve this matter, New Image and its directors have refused to discuss rectifying the outstanding entitlements."

Court documents show New Image, its agents and employees have information relevant to and necessary in determining the cause of Omegatrend's liquidation, and events that occurred before its collapse.