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 you can:

For more information on corporate insolvency review the resources below or contact us today.


If a creditor is owed money by a company, there are many ways they can seek to recover it. Directors and companies should be aware of their rights and obligations in the event that debt collection processes are in full swing and the company is exposed to legal action and enforcement.

Taking an interest in the liquidation of a company that owes you money may help you to secure a better financial return. Whether you’re an employee who is owed wages or a supplier seeking payment, here is an overview of the rights and obligations of creditors in insolvency.

When a company goes into liquidation, the Liquidator will use a Creditors’ Meeting to communicate with the creditors about the progress of the liquidation and to seek approval or guidance from creditors. In the case of Creditors Voluntary Liquidation a creditors’ meeting is required to be convened within 11 days of the appointment of a liquidator.

One of the most powerful tools wielded by the Australian Taxation Office is the ability to issue a Director Penalty Notice (DPN) against company directors for certain company debts including PAYGW and SGC. Serious implications flow from non-compliance with the ATO’s requirements it pays to be informed, upfront, lodge company statements on time and to maintain good order in the books.

A formal insolvency commences when a company is unable to pay its debts, prompting the appointment of an external administrator. Understanding the overall insolvency framework can assist you to lessen any financial and emotional impact as you move through the complex insolvency processes. The three most common types of formal insolvency appointments are Voluntary Administration, Liquidation and Receivership.

Insolvent trading occurs when a company is unable to pay its debts and continues to incur further debt. When a company is experiencing a cash flow or liquidity crisis, it is important that its directors and officers consider the company’s ability to pay all of its debts as and when they become due.

The Corporations Act 2001 (Cth) (Act) permits liquidators to recover certain transactions made within a set period before the commencement of a company’s liquidation. These transactions are known as “voidable transactions”.

Get a broad overview of the major steps in turnaround strategy. One of the major drivers for business insolvency is failure to challenge business models and take strategic action early. When businesses started to find themselves in a tight financial position it is vital that an appropriate turnaround strategy is implemented quickly.



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