The Fair Entitlements Guarantee is the upgraded government scheme helping employees who lose their job and have outstanding entitlements because their employer goes into liquidation or is bankrupt. This scheme is run by the Department of Education, Employment and Workplace Relations.
From 5 December 2012, the Fair Entitlements Guarantee (“FEG”) replaces the General Employee Entitlements and Redundancy Scheme (“GEERS”).
GEERS will continue to operate for claims about unpaid entitlements from businesses that liquidated or went bankrupt before 5 December 2012.
Eligible employees may be able to get assistance through the Fair Entitlements Guarantee for:
- 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.
The administration of claims under FEG will be largely the same as those associated with administering claims under GEERS except for the following keys differences:-
- Claims should be lodged no later than twelve (12) months after the Insolvency date;
- Claimants must be Australian Citizens or permanent residents or holders of special category visas;
- Unlike GEERS, under FEG there is no eligibility requirements relating to Deed of Company Arrangement and Personal Insolvency Agreements;
- Unlike GEERS, where entitlements are paid only up to the date of the appointment of an Insolvency Practitioner, FEG entitlements are paid up to the end of employment and simply reduced by the portion an Insolvency Practitioner is required to pay as a cost of winding up;
- The assessment of claims involving a transfer of business or employment to a new operator will be simplified from 1 July 2014; and
- Under FEG, claimants have a right to an external review by the Administrative Appeals Tribunal if they remain dissatisfied with a decision after an internal review has been undertaken by the department.
It is important to note that currently both Schemes do not acknowledge any excluded claims of the Directors and Related Parties.