New Scheme in Affect for Government Assistance with Termination of employment
The Fair Entitlements Guarantee (FEG) is a legislative scheme established under the Fair Entitlement Guarantee Act 2012 (the Act) which commenced on 5 December 2012 and replaced the General Employee Entitlements and Redundancy Scheme (GEERS) scheme.
Like GEERS, FEG provides assistances to Employees who are owed certain employee entitlements after losing their job because their employer went bankrupt or into liquidation may be able to get financial help from the Australian Government.
Subject to certain exclusions, employees are eligible for FEG assistance if they meet certain conditions of eligibility under section 10 of the Act. To be eligible for FEG employees will need to prove the following: • that employment with the relevant employer has ended;
- the former employer entered liquidation or bankruptcy on or after 5 December 2012; and
- that the end of your employment:
- was due to the insolvency of your employer;
- occurred less than 6 months before the appointment of an insolvency practitioner for the employer;
- occurred on or after the appointment of an insolvency practitioner for the employer;
- you are owed employment entitlements such as wages, annual leave, long service leave, notice period payment and redundancy severance;
- whether reasonable steps where taken to prove those debts in the winding up or bankruptcy of the employer;
- whether, if you were owed employment entitlements before the insolvency event occurred, reasonable steps where taken to have them paid;
- at the time employment ended, you were an Australian citizen or, under the Migration Act 1958, the holder of a permanent visa or special category visa; and
- whether you, or a person on your behalf, have made an effective claim that you are eligible for an advance.
Ineligibility for FEG
FEG is a basic payment scheme for employees only. Other classes of workers, for example contractors and sub-contractors, are not eligible for assistance. Some classes of employees are also ineligible for FEG assistance. You will be ineligible if:
- you have a personal connection with the employer (relative, spouse or de facto partner);
- you became an employee of the employer shortly before the insolvency event following a period working as a contractor; or
- your former employer was within the scope of the Special Employee Entitlement Scheme for Ansett Group Employees.
- You will not be eligible for an advance for payment in lieu of notice and redundancy if the business of your former employer is transferred to a new employer and, within 14 days of the end of your employment, the new employer offers to employ you to do work that is the same, or substantially the same, as the work you did for your former employer and on terms and conditions substantially similar to, and considered on an overall basis, no less favourable than those under which you were employed immediately before your employment ended
The FEG covers the following employment entitlements:
- wages – up to 13 weeks of unpaid wages ending at the earlier of the following times:
- the time employment ended
- the first time an insolvency practitioner had power (however expressed) to control or manage your employment by your former employer
- annual leave;
- long service leave;
- payment in lieu of notice – maximum of 5 weeks; and
- redundancy pay– maximum of 4 weeks per full year of service and pro-rata for less than a full year of service, if the governing instrument provides such an entitlement.
For the purpose of calculating the amount of payment, employment entitlements are capped by the FEG maximum weekly wage. If you earned more than the FEG maximum weekly wage we will calculate your employment entitlements as if you earned the FEG maximum weekly wage at the time your employment ended.The FEG maximum weekly wage is $2,451.00 from 1 August 2013. The FEG maximum weekly wage is indexed annually in line with movements in the ‘average weekly ordinary time earnings’ (AWOTE).
If you have any further questions about your potential entitlements under the new FEG scheme please contact usBack