Wage protection bill introduced

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Wage protection bill introduced

A Bill has been introduced into the Senate which aims to protect the interests of employees in the event of the insolvency of their employers.

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A Bill has been introduced into the Senate which aims to protect the interests of employees in the event of the insolvency of their employers. The Bill is a response to many recent incidences of employers becoming insolvent, including the miners at Cobar.

The Employee Protection (Wage Guarantee) Bill 1998 was introduced into the Senate on 14 May 1998 by ALP Senator, Michael Forshaw. The Bill is to provide for the establishment and administration of a scheme to guarantee the payment of wages and certain other liabilities owed to employees in the event the employer becomes insolvent.

In order to achieve this, the Bill seeks to:

  • establish a scheme of wage protection insurance;
  • require employers to insure their workforces according to the scheme; and
  • provide for the determination and enforcement of claims under the scheme.

The Bill states that an employer must take out and maintain a wage protection insurance policy with an approved insurer. However, the Bill makes provision to exempt certain employers from the requirement to hold wage protection insurance. An employer may be exempt if:

"(a) employer’s employees are not employed for the purposes of a trade or business carried on by the employer; and

"(b) the employer’s annual payroll does not exceed $7,800 (indexed)."

The policy will protect an employee in regard to the following liabilities owed by an insolvent employer to an employee.

  • A liability for unpaid wages.
  • A liability resulting from termination of employment without notice or with insufficient notice.
  • A liability for annual leave or long service leave.
  • A liability for repayment of a premium or other amount paid by the employee to the employer for training in a particular trade or profession.

According to the Bill, employers will have certain obligations with respect to providing information to employees regarding the wage protection insurance taken out by the employer. An employer must provide each employee, in a form approved by the Insurance and Superannuation Commissioner, with information explaining the employee’s rights under the policy and stating the name of the insurer. The employer must also provide the employee with the name and address of the insurer if the employee so requests.

The Bill also contains provisions dealing with approved insurers, a scheme for dealing with ‘bad risks’, claims and administration of the legislation.

 

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