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The AWU and AMWU are taking landmark legal action against a company director to claim more than $2 million in entitlements for 57 members put out of work by the collapse of his Victorian company Forgecast Australia Pty Ltd.

The AWU and the AMWU are parties to the personal action against company director Ian Beynon, the sole director of Forgecast, and Ideal Pty Ltd, another company controlled by Beynon.

Papers lodged with the Federal Court last week claim the workers were made redundant on 26 November 2009, but were not paid entitlements due to them under AWU and AMWU agreements.

AWU Victorian Secretary Cesar Melhem said unions would not back away from pursuing company directors where they believed workers had not been paid their due entitlements.

"We are tired of seeing workers shortchanged when companies go under. If ASIC and other regulators will not do the job, we will take action, present the evidence and let the courts decide," Mr Melhem said.

“There can be no industrial justice where legal agreements are not honoured. Unions have the energy and the resources to pursue those who we believe have done less than fulfil their obligations to employees, whatever the circumstances,” he said.

AMWU National Secretary Dave Oliver said the case highlighted the need for a federal government scheme to guarantee workers’ entitlements in full.

“We have seen too many cases where workers are left with nothing but GEERS payments, which does not cover their full legal entitlements or any superannuation that an employer hasn’t passed on,” he said.

“Employers need to be held accountable so they meet their obligations to workers instead of shifting the burden to the taxpayer.

"We’re taking this landmark legal action because our members at Forgecast Australia and dozens of other companies have been victims of a system that allows bosses to use corporate law to avoid paying workers what they are legally owed."

Slater and Gordon industrial relations lawyer Marcus Clayton said the legal action was believed to be first time new workplace laws, allowing unions to sue company directors personally, had been used.

“The unions’ case is that Beynon was involved in Forgecast’s contraventions of the AWU and AMWU agreements, and the Fair Work Act (2009) provides that a person involved in such a contravention is equally liable (as a company),” Mr Clayton said.

“If successful this legal action will set a precedent for future litigation where workers have been left without their entitlements after a company has gone broke.”

Mr Clayton said the law suit covered 57 former employees, with claims for individual workers ranging up to approximately $98,000.

“With this litigation we are aiming to pierce the corporate veil which has traditionally been able to shield the personal assets of company owners.”