The Government needs to “step in now” to ensure redundancy and benefits to which Fastway workers are entitled are “paid immediately”, according to a union leader.
Hundreds of workers at the group are in limbo after the company went into receivership last week, unable to apply for social welfare for the next month but not being paid by the courier firm.
Staff have been informed that they will not be paid for their final week of work pending a 30-day statutory consultation period before any claims can be made to the State’s Insolvency Payments Scheme.
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They will remain as employees of the company during the period and will thus be ineligible for jobseeker’s benefit.
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“They were told they cannot sign on for 30 days or look for employment as they are still technically employed,” said a close family member of one of the workers.
“It’s absolutely desperate for families just seven weeks before Christmas. If they sign on or take up employment, they have been told they will forfeit their right for wages owed and redundancy where applicable.”
Receivers Mark Degnan and Brendan O’Reilly of Interpath Advisory are understood to have told staff it will likely be next year before they receive statutory redundancy payments from the State scheme.
Seán McDonagh, general secretary of the Communications Workers’ Union, said the treatment of up to 300 Fastway workers and 700 subcontractor and franchisee delivery contractors was “appalling”.
“The receivers must also prioritise the livelihoods of subcontractors and franchisees, including the transfer to their services to other delivery operators to help take up the vacuum left by Fastway,” he said.
Mr McDonagh said Fastway was “competing against global companies with significant investment behind them including DPD, UPS, DHL and Amazon, to name just four of the main players”.
“These companies have massive international networks,” he said. “It is also worth noting that, apart from Amazon which also benefits from State business and supports, these companies have unionised workforces.
“The fact is that Fastway was a highly leveraged company that had been acquired by a venture capital concern and saddled with very high cost of capital. Previous owners made millions, but the current owners could not make their gig economy model work.”
Mr McDonagh said delivery services “must be paid for”, and that “some operators” are participating in a “race to the bottom, including Fastway”.
“Fastway workers are paying the price for a failed flawed model, with its owners overpaying in the expectation that business would continue at Covid-19 levels which was never realistic,” he added.
In a statement, Mr Degnan and Mr O’Reilly said they “are working diligently across all areas of the business to manage what is a highly complex situation in an orderly and fair manner.”
“As a priority, we are following the appropriate legal and operational processes to safeguard assets, communicate with clients and support affected employees, contractors and retailers.
“We appreciate that this situation is frustrating for businesses, customers and staff, particularly given the timing and proximity to the busy trading period, and we ask for patience as we continue to work methodically through the issues to ensure the best possible outcome for all stakeholders.”
