No FEG-in’ way!

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No FEG-in’ way!

The Turnbull government has opted not to re-introduce its controversial Fair Entitlements Guarantee Amendment Bill to Parliament.

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It appears the Turnbull administration has decided not to re-introduce the Fair Entitlements Guarantee Amendment Bill. 

Senator Cash, the Minister for Employment, announced the decision in the Senate Estimates Committee yesterday.

WorkplaceInfo sought confirmation the Bill would not be re-introduced, however, Hansard for that Committee from yesterday is not currently available and confirmation from the office of Senator Cash was unavailable owing to the senator's participation in an imminent media briefing.

From GEERS to FEG


Previously referred to as the General Employment Entitlements & Redundancy Scheme (GEERS), the Fair Entitlements Guarantee is a basic payment scheme established to help employees who have lost their jobs because of the liquidation or bankruptcy of their employer and who are owed certain employee entitlements. 

The Fair Entitlements Guarantee covers capped unpaid wages, annual and long service leave, capped payment in lieu of notice and capped redundancy pay.

Unaffordable moral hazard


The FEGs Amendment Bill was first introduced into Parliament in September 2014 by the then Leader of the House, Christopher Pyne, who argued that the scheme had become unaffordable.

“Over time, the costs borne by the scheme have increased significantly. Demand has increased from 8626 claimants being paid $72.97 million in 2006-07 to 16,019 claimants being paid $261.65 million in 2012-13. This trajectory of increase in the cost of the scheme is not sustainable. To ensure the future sustainability of the scheme, changes must be made,” he told the House of Representatives back in 2014. 

It was also argued that the FEGs as is created a “moral hazard” in that it provided an incentive for employers and unions to sign up to unsustainable redundancy provisions as the Australian taxpayer would pay up if the employer failed. 

Bizarre attack on workers' rights


The Opposition regarded those arguments as “bizarre” as it would mean that employees would “value highly” a provision that would only happen in the event of an insolvency in the future.

Andrew Giles (ALP, Scullin) also argued that the value of the compensation was a matter for employers and employees to decide in good faith. He then argued that it was a government attack on workers.

The current Shadow Minister for Employment, Brendan O’Connor, took up this line of attack in a statement this morning:

“The Abbott-Turnbull Government’s Fair Entitlements Guarantee Amendment Bill 2014 would significantly cut the entitlements of workers who lose their jobs through no fault of their own. 
Nowhere was this proposal felt more strongly than in the electorate of Herbert. The government’s proposed cuts would have adversely affected the workers who lost their job as a result of Queensland Nickel’s collapse and those cuts were repudiated by the community. It is pleasing to hear that all those Queensland Nickel workers who filed a FEG claim have been paid their entitlements.”

Read our summary on the FEG by tapping here!
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