In the case of business failure: your obligations for employee entitlements
Last month, we discussed recent Senate committee proposals to strengthen the civil penalties regime under the Corporations Act 2001 for corporate wrongdoing. Today we want to talk about another area that the Government has identified for a compliance crackdown; employee entitlement liabilities in the case of insolvency. The Government is currently consulting on a range of options contained in a paper ‘Reforms to address corporate misuse of the Fair Entitlements Guarantee scheme’ (Note: Submissions close on 16 June 2017). The Fair Employment Guarantee (FEG) scheme is intended as a ‘safety net’, where the Government ensures employees get certain entitlements in the case of their employer going insolvent. After paying a claimant, the Government then becomes a creditor of the insolvent business. The scheme cost $1 billion over the four-year period…