The Commonwealth Government set up a scheme to pay out employee entitlements in the event of a company collapse. It is known as the Fair Entitlements Guarantee (“FEG”) and information regarding the scheme is set out on their web site http://employment.gov.au/fair-entitlements-guarantee-feg. The scheme will pay for the following entitlements if the employee’s termination resulted from the company collapse:
- Unpaid and underpaid wages (up to thirteen weeks);
- Unpaid annual leave;
- Unpaid long service leave;
- Unpaid pay in lieu of notice (up to five weeks);
Unpaid capped redundancy pay (up to four weeks per year of service).
The scheme is a discretionary scheme and accordingly your entitlements are not be guaranteed FEG.
The FEG scheme does not cover unpaid superannuation and employees should be aware that the scheme will not pay out their entitlements if they resign after the appointment of a liquidator or after the appointment of a Voluntary Administrator. The FEG scheme will only respond if the employee’s employment comes to an end by the company terminating the contract of employment.
If you would like to discuss how the FEG scheme may be applied for your company liquidation, call the company liquidation experts on 1800 731 155.
The information provided in this site is general in nature andshould not be relied upon for your specific circumstance. Call us on 1800 731 155 for a free initial consultation to discuss your specific issues.