Business failure

With recession knocking at Australia’s door what is the risk to employee’s entitlements?

Businesses do collapse and at most times it is when the employee at least expects it to happen.

In most cases when a business fails it leaves money owing to their employees such as unpaid wages, leave entitlements, severance pay, and bonuses just to name a few items. Then there are the secured and unsecured creditors who are owed money as well.

So what happens to the employee entitlements in a business collapse?

Under Australian law there are statutory priorities that ensure the employees recover their debts a head of creditors.

As of 2012 the General Employee Entitlements and Redundancy Scheme (GEERS) was legislated that provided a safety net to employees when a company fails.

Under the Fair Entitlements Guarantee Act 2012 when company’s fail, employees may lodge a claim with the Department of Employment for an advance against unpaid entitlements. But this will only apply if the employment ends due to insolvency of the business, which time allowed includes 6 months before the business fails. However, here’s the thing, an employee that has connection to the employer, such as being a company director or spouse of one, or a relative of the employer or director, no claim can be made. When an employee makes a claim they may cover up to 3 months’ unpaid wages and other entitlements, and may also include payment in lieu of notice and redundancy, which will all be subject to the circumstance of the failed business.

The Fair Work Act 2009 also has remedies available to an employee to pursue but each claim must be assessed on its merits in respect to the statutory responsibilities of the failed employer.

The loss of work is never easy on any person, especially where there are family bills to be paid. The economy is changing and there will always be businesses that fail, and claims that need to be made by employees for the lost entitlements. However, the best action by an employee is to be proactive with knowing what is happening within the company, it’s not hard to do, you just need to ask the right questions, to get the right answers!

A key point for employees is that now they can use electronic communication in pursuing their outstanding entitlements with filing claims on online through relevant government organisations, this process being both money and time saving to the employee.

There is a lot of uncertainty in the business environment, and employees are totally dependent on the employer to protect and secure their proper entitlements. So no matter what type of employee you may be, always stay on top of what entitlements you are owed by the employer, as this will assist you in raising a timely claim against the employer.








Fair Entitlements Guarantee Act 2012のもと、企業が倒産した時、従業員は未払いの給付金の貸与分を求めて、雇用省に損害賠償請求をすることが可能だ。しかしこれは、企業倒産6カ月前までの期間を含み、企業の破産状態により、雇用が終了した場合にのみ適用されることになる。しかし、ここに問題がある。例えば、取締役または取締役の配偶者、若しくは雇用主または取締約の肉親といった雇用主と関係のある従業員は、どのような申し立ても出来ない、ということだ。従業員が申し立てをする時、最大3カ月分の未払い賃金と他の給付金を補償を求めるかもしれないし、そしてまた解雇予告及び解雇時補償金も含むかもしれないが、このようなこと全ては、倒産した企業の状況次第なのである。


雇用の喪失はどのような人にとっても、とりわけ家計を負担しなければならない人にとっては、決して気楽ではない。経済は変化していて、常に倒産する企業や、従業員による失った給付金を求める要求が存在する。 しかし、従業員にとっての最善の行動は、先を見越して、企業内で何が起きているかを知ることだ。これは困難なことではないし、正しい答えを得るために、あなたは正しい質問をすればいいだけなのだ!