Protect Yourself from Illegal Phoenix Activities

Genuine company failures do occur, not all company failures are involved in illegal phoenix activities. Illegal phoenix activity involves those in control of companies, such as directors or former directors, intentionally closing down companies (e.g. by appointing liquidator(s) for the company) after transferring the  assets of an indebted company  to new (“phoenix”) companies in order to avoid paying debts owed to creditors, employees and statutory bodies.

Illegal phoenix activities adversely impact the employees, business sectors, creditors and governments, as per advice from the ATO. There are some warning signs that can help you identify a company that may be involved in illegal phoenix activity.

  • Warning signs for an employee or contractor:
    • Not receiving a pay slip
    • A different employer name appearing on the pay slip records to whom you believe you work for
    • Superannuation or other employment entitlements are not being paid
  • Warning signs for business owners
    • Competitors offering significantly lower quotes
    • A quote given that is lower than market value
    • Directors of a company you are working with being involved with liquidated entities
    • A company you are working with requesting payments to a new company
    • Recent changes of company directors and name, but managers and staff remaining the same

The government is endeavouring to combat illegal phoenix activities by assisting those who may have been victims of illegal phoenix activities. A number of ways include:

  • ATO offers assistance in chasing lost or unpaid super
  • Department of Employment administers the Fair Entitlements Guarantee offering assistance in chasing unpaid employment entitlements.
  • Fair Work Ombudsman offers advice as to the minimum wages and conditions of employment.