Employee Entitlements Safety Net

When a director is contemplating putting their company into liquidation, one of their biggest fears is often that their loyal and hardworking staff won’t be paid their entitlements.

Fortunately there’s a government safety net that protects employee entitlements in these situations.

The Fair Entitlements Guarantee (FEG) is available to employees who weren’t paid their entitlements because their employer went bankrupt or into liquidation on or after 5 December 2012 (the date FEG came into effect). For employees who weren’t paid their entitlements because their employer went bankrupt or into liquidation on or before 5 December 2012, these entitlements are caught under the General Employee Entitlements and Redundancy Scheme (GEERS) (the predecessor of FEG).

FEG and GEERS are administered by the Federal Government’s Department of Employment (DOE).

Eligible employees can claim:

  • up to 13 weeks unpaid wages
  • unpaid annual leave
  • unpaid long service leave
  • up to 5 weeks unpaid payment in lieu of notice
  • up to 4 weeks unpaid redundancy entitlement per year.

While this is great news for employees, the average timeframe for receiving payment after lodging an FEG claim is three to five months (depending on the DOE’s workload). FEG and GEERS also do not cover unpaid superannuation.

It’s also unavailable for:

  • ‘excluded employees’ (e.g. company directors, principals of bankrupt employers and their relatives, etc.)
  • contractors
  • subcontractors
  • agents
  • shareholders
  • investors
  • volunteers
  • anyone owed money by the employer for reasons other than employee entitlements.

For more information about FEG and GEERS you can:

For more information on corporate insolvency or specific insolvency services, contact the team at Rapsey Griffiths on (02) 4929 3019 for a confidential consultation.