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Safeguarding employee entitlements: The Fair Entitlements Guarantee

Insolvency Law News | February 2013

From 5 December 2012, the Commonwealth’s new “Fair Entitlements Guarantee” [“FEG”] replaced the former General Employee Entitlements and Redundancy Scheme [“GEERS”].  Administered by the Department of Education, Employment and Workplace Relations [“DEEWR”], FEG is designed to safeguard the outstanding wages and other entitlements of employees of failed companies and businesses. The scheme allows employees to recover outstanding entitlements ahead of other creditors of the failed employer. Unlike GEERS, the FEG arrangements allow employees to claim entitlements right up to the end of their employment, and not just up to the date of appointment of a liquidator or trustee.

It should be noted, however, that the GEERS arrangements will continue to apply in respect of companies or businesses that went bankrupt or commenced liquidation prior to 5 December 2012.

Employees eligible to benefit from the scheme may be able to seek assistance through FEG to recover:

  • Up to 13 weeks’ worth of unpaid wages;
  • Up to 5 weeks’ worth of unpaid payment in lieu of notice;
  • Up to 4 weeks’ worth of unpaid annual redundancy entitlements;
  • Unpaid long service leave; and
  • Unpaid annual leave.

Employees seeking to make a claim under the FEG scheme must lodge any such claim within 12 months of the date of insolvency of their employer.

If you have any doubts about the solvency of your company or business, or if you simply require advice on your duties and responsibilities as a director, manager or employer, please do not hesitate to contact Forum Law to arrange a consultation.

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