Judge slams ‘brazen’ bid to phoenix translation business

The precarious working conditions faced by interpreters are again highlighted in an article published in The Australian Financial Review this week.

“The Supreme Court of Victoria ruled on May 11 that Intellicoms, a company that trades under the name Ezispeak in Australia and New Zealand, had been illegally sold to a family member in 2021 - at well under market value.”

The Court’s ruling comes subsequent to the introduction of new anti-phoenixing laws in 2020. The term ‘phoenixing’ is when a company transfers assets for less than market value or less than the best price reasonably obtainable to avoid the payment of creditors.

CEO of Ezispeak, Rebecca Haynes, sold the business and its assets to a third party, Technologie Fluenti in September 2021, on the same day that the business went into voluntary liquidation. The Court found that this was an attempt to avoid meeting $3.27 million in liabilities – among which may include fees owed to contractor interpreters.

If interpreters had been employees in this circumstance, there are provisions in place to potentially prioritise their entitlements and access to compensation under the Fair Entitlements Guarantee (FEG).

However, because Ezispeak engages interpreters as contractors, they must join the queue with other creditors where they might receive a percentage of what they are owed, provided there are funds available.

At this stage we don’t know if interpreters will receive any monies owed to them.

Despite concerns raised about Ezispeak’s position raised by this union in the latter part of 2021, the business has continued to provide services to both corporate and government clients in Australia and New Zealand.

TIA has perused the Judgement and notes the following:

• There are a number of companies, including language services companies, that in the lead up to the hearing expressed interest in purchasing the Ezispeak business;
• Paragraph 115 – In negotiating a debt to a shareholder and creditor, Ms Haynes sought opportunity to improve her company’s financial position by restructuring the labour cost model – by abolishing the minimum 15 minute telephone payment and substituting it with a per – minute payment model;
• Paragraph 189 (b) –“… historically, the business has delayed payment to creditors, as evidenced by the fact that the business’ creditor balances have been historically higher than the receivable balances.”
  
  Our members included – at times waiting month, if not years, to be paid! 
• Paragraph 206(b) –“… a new compensation model forcontractors had been introduced which had, in the most recent financialreports, increased the business’ gross profit margins from 28.19% to approximately 45% in the period from 1 July 2021 to 8 September 2021.”

This coincides with the reduction in your rates at July 2021.

For full context read the Judgement here.

If Rebecca Haynes appeals the Court’s ruling, Ezispeak will be able to continue to trade until the appeal is heard. Given the Judge’s scathing comments – there’s no reassurance that Ezispeak will treat interpreters any better under Technologie Fluenti.

Does Ezispeak owe you money? Let us know tia@professionalsaustralia.org.au Join your union to get a fairer deal for translators and interpreters.