Fair Entitlements Guarantee Bill introduced

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Fair Entitlements Guarantee Bill introduced

The Federal Government introduced a Bill today to establish the Fair Entitlements Guarantee — to replace the existing administrative scheme applying to employees of businesses that fail to pay redundancy entitlements.

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The Federal Government introduced a Bill today, Thursday, to establish the Fair Entitlements Guarantee — to replace the existing administrative General Employee Entitlements and Redundancy Scheme applying to employees of businesses that fail to pay redundancy entitlements.

The Gillard Labor Government’s Protecting Workers’ Entitlements package claims to provide the strongest protection of employee entitlements Australian workers have ever had.

In the Second Reading Speech, the Minister for Workplace Relations, Bill Shorten said:
‘The Bill will provide certainty for Australian employees who find themselves without a job and left out of pocket when their employer becomes insolvent or bankrupt and cannot pay them the employment entitlements they are owed …

Eligible entitlements
 
Under this Bill, eligible employees will be covered for unpaid entitlements including:
    • Redundancy;
    • Annual leave;
    • Long service leave;
    • Wages; and
    • Payment in lieu of notice.
In the majority of cases, employees will be entitled to an advance for paid entitlements as provided for in the relevant industrial instrument under which they are employed.

The Bill will protect redundancy pay, up to a maximum of 4 weeks per year of service. This will mean that most employees will receive all of the redundancy entitlements they are owed.

The Bill will only enable payment of unpaid wages for up to 13 weeks and will provide payment in lieu of notice at 5 weeks.

[Employees who continue to be employed]
 
This Bill also strengthens the recognition of eligible entitlements for employees who continue to be employed following the appointment of an insolvency practitioner. Under current arrangements, some employees lose out if they continue working through the administration of the company and neither the administrator nor GEERS covers their paid entitlement.

From now on if you are an employee in this situation you will be entitled to receive unpaid entitlements accruing right up to your last day of working …

[Creditor]
 
Where an advance for entitlements is made, the Commonwealth is empowered for recovering advances from the dividends payable once companies are wound up. In doing so this Bill proposes that the Commonwealth have the same rights as creditors in the winding up or bankruptcy of the business that the employee would have otherwise had.

Eligible employees
 
Some people will not be eligible for advances under this proposed legislation. The Bill maintains existing arrangements under GEERS that advances will not be payable to people that are excluded under the Corporations Act — contractors, directors and family members of a director.

This Bill mirrors existing GEERS arrangements that assistance will not be available to support business restructures or where insolvent entities are able to pay employee entitlements within a reasonable period.

The Government has also taken the opportunity to simplify the assessment of transfer of business arrangements. To this end, from 1 July 2014, only where a claimant’s entitlements and service are recognised by the new employer will they be ineligible for financial assistance under the Bill.

This measure will overcome operational barriers in assessing claims and reduce unnecessary delays in employees receiving their entitlements.’
 
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