ACFS Port Logistics administrators secure court approval for union agreements as sale process continues

The administrators of ACFS Port Logistics Pty Ltd, one of Australia's largest container logistics businesses, have secured Federal Court approval to enter into new enterprise agreements with two major unions as receivers continue operating the business while pursuing a sale or recapitalisation. In separate decisions delivered on 24 September and 6 November 2026, Justices Younan and Jackman authorised agreements with the Maritime Union of Australia (MUA) and Transport Workers' Union of Australia (TWU), respectively, while limiting the administrators' personal liability under the arrangements. The agreements will add approximately $5.5 million to annual labour costs but are intended to preserve industrial stability and avoid disruptions that could undermine the sale process and potentially trigger approximately $50 million in employee entitlements.

ACFS and its wholly owned subsidiary, ACFS Investments 1 Pty Ltd, operate a transport, warehousing and freight logistics business handling a substantial volume of Australia's seaborne freight. At the time of their insolvency appointments, the business employed approximately 1,100 people and operated from 19 leased facilities across Australia and New Zealand, including major locations at Port Botany, Brisbane, Melbourne, Adelaide, Perth and Auckland.

On 6 August 2026, secured creditor Scottish Pacific Business Finance Pty Ltd (ScotPac) appointed Sule Arnautovic, Jessica Perri and Anthony Elkerton of Salea Advisory as joint and several voluntary administrators of ACFS and ACFS Investments. ScotPac simultaneously appointed Andrew Sallway and Duncan Clubb as receivers and managers of both companies.

The group faces substantial liabilities. ScotPac is owed approximately $45 million, while the Deputy Commissioner of Taxation has lodged a claim of approximately $75.9 million. ACFS's unadjudicated liabilities were preliminarily estimated at approximately $553 million, including approximately $50 million in potential priority employee claims under a worst-case liquidation scenario. A winding-up application involving the Deputy Commissioner remains on foot but has been adjourned by consent.

The receivers have continued operating the business with ScotPac's support, paying employees in the ordinary course and making no redundancies. Their objective is to sell the business as a going concern or secure a recapitalisation, with binding sale documents not expected before March 2027 and completion potentially extending to September 2027 if regulatory approval is required.

Maintaining workforce stability during that period has become a priority. ACFS's workforce is substantially unionised, with approximately 700 employees covered by an enterprise agreement with the TWU and approximately 58 employees at its Melbourne and Adelaide facilities covered by an agreement with the MUA. Both agreements passed their nominal expiry date on 30 June 2026.

Negotiations with the MUA became contentious after the union secured authorisation for protected industrial action and issued notices proposing work stoppages and restrictions on unloading trucks, containers and trains. The notices were withdrawn after an in-principle agreement was reached in September, but the administrators sought court protection before committing ACFS to the arrangement.

On 24 September, Justice Younan authorised the proposed MUA agreement, which will increase annual labour costs by approximately $1 million, finding that the additional expense was modest compared with the risk of industrial disruption, lost revenue and damage to the sale process.

The administrators subsequently returned to Court seeking equivalent relief in respect of a replacement TWU agreement covering approximately 700 employees nationally. The proposed agreement, which has a nominal expiry date of 30 June 2029, provides for wage increases of 4% from July 2026, followed by increases linked to inflation in 2027 and 2028, together with additional superannuation contributions. The agreement is expected to add approximately $4.5 million to annual labour costs, against ACFS's existing annual labour expenditure of approximately $165 million.

In his 6 November decision, Justice Jackman accepted that the agreement was in creditors' interests, noting that failure to finalise it could severely disrupt operations and jeopardise the sale process. The Court was told that the agreement would help avoid crystallising approximately $3.15 million in payment-in-lieu-of-notice obligations and $10.44 million in redundancy liabilities relating to the affected employees. More broadly, a collapse of the business could trigger approximately $50 million in total employee entitlements and result in the loss of approximately 1,100 jobs.

In both applications, the administrators sought protection from potential personal liability under section 443A of the Corporations Act 2001, given uncertainty over whether entering into enterprise agreements could expose them to employment obligations extending beyond the administration. The issue was particularly significant because the receivers, rather than the administrators, controlled day-to-day trading.

Both judges granted orders confining any personal liability of the administrators to obligations accruing during, or attributable to, the administration period, with liability further limited to the extent of their statutory indemnity. The orders do not alter creditors' existing rights or priorities, including employee claims, the receivers' statutory liability for wages and ScotPac's secured creditor rights.

The decisions allow ACFS to proceed with the proposed workforce arrangements while the receivers pursue a going-concern sale or recapitalisation, with the courts accepting that the additional labour costs are justified by the need to preserve operational continuity and maximise recoveries for creditors.

Emma Beechey SC of New Chambers (instructed by Mills Oakley) represented the administrators.