Programme 2.1 Employee assistance

Fair Entitlements Guarantee and General Employee Entitlements and Redundancy Scheme

The department administers the Fair Entitlements Guarantee (FEG) and General Employee Entitlements and Redundancy Scheme (GEERS), which provide a safety net to protect the entitlements of workers who have lost their jobs as a result of the bankruptcy or liquidation of their employer. The FEG provides assistance to employees whose employer went bankrupt or entered liquidation on or after 5 December 2012; GEERS applies if an employer went bankrupt or entered liquidation before 5 December 2012.

The schemes cover five basic employment entitlements: unpaid wages (up to 13 weeks), unpaid annual leave, unpaid long service leave, unpaid payment in lieu of notice (up to five weeks) and unpaid redundancy (up to four weeks for each full year of service). Payments are also subject to a maximum weekly wage cap.

During 2013–14:z   more than $16.48 million was recovered from liquidated companies on behalf of the Commonwealth through creditor dividends in the winding-up process. The recoveries relate to advances made within or before 2012–13.

  • z a total of $197,193,316 was paid under the FEG and  GEERS to 11,255 eligible claimants from 1536 insolvent entities
  • $182,137,836 was paid to 9952 people under the FEG
  • $15,055,480 was paid to 1303 people under the GEERS
  • the FEG/GEERS hotline  handled 38,734 inquiries about the operation  of the schemes
  • the department initiated an internal review of 767 FEG claim decisions under section 37 of the Fair Entitlements Guarantee Act 2012 (4.8 per cent of the total number of employees claiming assistance)
  • claimants made formal requests for review of 452 FEG decisions under section 38 of the Act (3 per cent of the total number of employees claiming assistance)
  • claimants dissatisfied with the outcome of their claim following internal review lodged 50 appeals under GEERS (25 per cent of the total number of employees requesting a GEERS review)
  • nine appeals to the Administrative Appeals Tribunal were lodged under the FEG by claimants who were dissatisfied with the outcome of their claim following internal review (2 per cent of the total number of employees requesting a section 38 review). Of the seven matters finalised by 30 June 2014, three resulted in the department’s decision being affirmed by the tribunal, three were withdrawn by the applicants, and one was dismissed by the tribunal on the basis of no jurisdiction
  • the department responded to three matters from the Commonwealth Ombudsman relating to FEG assistance. In each case the Commonwealth Ombudsman closed its inquiry without making any adverse findings about the administration of the FEG.

In administering the FEG and GEERS, the department worked closely with insolvency practitioners to verify unpaid employment entitlements and distribute approved payments to employees.

The department surveyed a random sample of insolvency practitioners involved in supporting the programme during 2013–14 to gauge their level of satisfaction with the department’s administration of the schemes. The ratings from the 129 insolvency practitioners who participated in the survey were as follows:  18.8 per cent very satisfied, 56 per cent satisfied, 18 per cent neutral, 5.5 per cent dissatisfied and 1.6 per cent very dissatisfied. Feedback provided in the survey will assist the department to further enhance its relationships with insolvency practitioners.

The Fair Entitlements Guarantee helps redundant Brindabella Airlines employees

On 4 February 2014, Brindabella Airlines Pty Ltd entered liquidation, making 94 permanent and casual employees redundant.  Most of the employees (83) were left with unpaid employment entitlements on termination and applied for financial assistance under the Fair Entitlements Guarantee.

At 30 June 2014, the department had assessed 71 claims and advanced more than $1.25 million to 70 eligible employees. The average time taken to assess the claims was 2.9 weeks after receipt of verified data from the insolvency practitioner. The amount advanced included $144,429.62 in unpaid wages, $405,385.84 in annual leave, $16,446.46 in long service leave, $325,113.29 in payment in lieu of notice and $359,676.43 in redundancy pay.

Brindabella Airlines is one example of the 1536 cases where assistance under the Fair Entitlements Guarantee or the General Employee Entitlements and Redundancy Scheme was provided to 11,255 Australian workers in 2013–14.