ACCI rejects employee advance as insolvency creditors

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ACCI rejects employee advance as insolvency creditors

A peak employer body today rejected the Federal Government proposal to bring forward employees in the queue of creditors after company insolvency, in a submission made to a joint parliamentary committee inquiring into Australia's insolvency laws.

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A peak employer body today rejected the Federal Government proposal to bring forward employees in the queue of creditors after company insolvency, in a submission made to a joint parliamentary committee inquiring into Australia's insolvency laws.

The Australian Chamber of Commerce and Industry's director of workplace policy, Peter Anderson, told WorkplaceInfo that he could not comment in detail today, as submissions made to the Parliamentary Joint Committee on Corporations and Financial Services inquiry would not be publicly released until sometime after Parliament sat next Tuesday.

But he said ACCI's submission was consistent with views it had expressed to the Howard Government last year. It supported the General Employee Entitlements and Redundancy Scheme, which caps entitlements at eight weeks (see 229/2001), and some amendments made to the corporations law which increased the onuses on company directors.

But he said ACCI did not support the Government's proposed amendments which would see employees brought forward in the queue of creditors.

The issue of where employee entitlements rank when it comes to treatment by insolvency administrators is ongoing in the case of the Ansett wrap-up, with the Victorian Supreme Court only late last month clearing the way for Ansett administrators to distribute the balance of employee entitlements.

The Ansett Superannuation Trustees were seeking to have $200 million held back for the benefit of 8,000 ground staff. However, the court found the trustees were not priority creditors thus allowing the administrators to pay the balance of redundancy payments.

Upcoming test cases

And employee entitlements will continue to be a hot issue, as evidenced in an employee survey released in Sydney today by Australian Council of Trade Unions President Sharan Burrow (see 30/2003).

The ACTU is gearing up for a test case expected before a full bench of the Australian Industrial Relations Commission in May, in which it is seeking to replicate the current NSW severance standard - a 16-week redundancy cap for workers under 45 years of age, and 20 weeks for workers aged 45 and over - into federal awards (see 187/2002).

Queensland unions are still waiting on an outcome in their test case on redundancy standards, run in the Queensland Industrial Relations Commission last year. In that case they also sought to replicate the NSW termination, change and redundancy standards, set in 1994 (see 30/2002 and 235/2002).

And in NSW, the Transport Workers Union is preparing a test case in the NSW IRC to insert provisions into the NSW Transport Industry (State) Award to protect 100% of workers' entitlements - via bank guarantee, a trust account or an underwritten insurance policy - in case of company collapse.

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