"But remember the labour hire payroll is Skilled's...

"But remember the labour hire payroll is Skilled's responsibility, so it naturally follows that all of their employee entitlements are too.

As you would be familiar with in this type of business, they occasionally do need to cut into this variable cost base when the business cycle calls for it.

Usually this results in redundancy / restructuring costs for qualifying employees on their books."


Vesupria,

Thanks for pointing that out, as I wasn't aware that was the case.

[I like it when a view I have on a stock is challenged by new or contrary information/opinion, because not knowing what one doesn't know is the biggest potential pitfall for investors, I think. (About 18 months ago I lost a bit of money on a small cap called WHK Group - subsequently re-named Crowe Horwath - because I had my blinkers firmly on when the warning signs were all there, and were being seen by some, but I didn't want to believe them.)]

Is this definitely the way the liabilities associated with employee entitlements work, to your knowledge? I had always thought the in the contract labour business, entitlements were factored into the contract price agreed with the customer.

Interestingly, your post got me thinking that, to the extent that margins in the Workforce Services division are at record lows currently, might that be a manifestation of the issue you raised.

Do you have a view on this?