It often happens that an employee who loses their employment because their employer went bankrupt or into liquidation does not receive their employee entitlements as there are no funds available to enable the Trustee or the Liquidator to make payment to the employee of their employee entitlements. Employees in this situation may be able to get financial help from the Australian Government through the Fair Entitlements Guarantee (FEG).
FEG is a legislative safety net scheme of last resort, with assistance available for:
- wages—up to 13 weeks of unpaid wages
- annual leave
- long service leave
- payment in lieu of notice—maximum of 5 weeks
- redundancy pay—maximum of 4 weeks per full year of service.
To be eligible for FEG assistance, former employees must meet all of the eligibility requirements outlined in the Fair Entitlements Guarantee Act 2012 (“the Act”) and in respect of which there are certain exclusions. In this regard section 10 of the Act provides that:
(1) A person is eligible for an advance if the Secretary is satisfied of all of the following:
(a) the person’s employment by a particular employer has ended;
(b) after the commencement of this section, an insolvency event happened to the employer;
(c) the end of the employment:
(i) was due to the insolvency of the employer; or
(ii) occurred less than 6 months before the appointment of an insolvency practitioner for the employer; or
(iii) occurred on or after the appointment of an insolvency practitioner for the employer;
(d) the person is (or would, apart from the discharge of the bankruptcy of the employer, be) owed one or more debts wholly or partly attributable to all or part of one or more employment entitlements;
(e) the person has taken steps, so far as reasonable, to prove those debts in the winding up or bankruptcy of the employer;
(f) if the person was owed any of those debts before the insolvency event happened, the person took reasonable steps before that event to be paid those debts;
(g) when the employment ended, the person was an Australian citizen or, under the Migration Act 1958, the holder of a permanent visa or a special category visa;
(h) an effective claim (see section 14) that the person is eligible for the advance has been made to the Secretary by or on behalf of the person.
Note: Subdivision B excludes certain persons from eligibility.
If person was employed for a partnership by partners
(2) If the person was employed for a partnership by 2 or more of the partners, paragraphs (1)(c), (d) and (e) apply as if each reference in those paragraphs to the employer were a reference to each of the partners who employed the person.
Trevor Rosenthal is able to assist you in the event that you have not been paid your employee entitlements in the circumstances detailed above. You can contact Trevor on his e-mail address email@example.com