‘Protect 100% of workers’ entitlements’: union scheme


‘Protect 100% of workers’ entitlements’: union scheme

The AMWU is proposing a new system to protect 100% of worker entitlements, similar to the way that bank deposits have been guaranteed by the Federal Government.


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The AMWU is proposing a new system to protect 100% of worker entitlements, similar to the way that bank deposits have been guaranteed by the Federal Government.
And until it is in place, the union wants the current GEERS scheme to pay the full entitlements of workers whose companies go into liquidation, instead of a capped amount.
$37 billion at risk
Union research shows that up to $37 billion of annual leave, superannuation and redundancy entitlements are not protected.
AMWU national secretary Dave Oliver said the union will make the protection of entitlements a key issue in upcoming wage negotiations in the manufacturing sector.
The study shows around $6 billion worth of entitlements is owed to 250,000 manufacturing workers.
Workers should not bear brunt of crisis
Oliver said Australian workers should not be left to bear the brunt of the global financial crisis.
‘The Federal Government has guaranteed business and bank savings but billions of dollars of worker entitlements in Australia remain unsecured,’ Oliver said.
‘While the government has delivered much needed investment to manufacturing, especially the vehicle industry, everyone acknowledges that the next year is going to be hard.'
12,000 more jobs lost by February
‘The AMWU estimates that more than 38,000 manufacturing workers have lost their jobs since last February, and expects that number will rise to above 50,000 by February 2009.’
Oliver said that that means thousands of workers may soon need to rely on their entitlements to continue to pay their mortgages and support their families.
‘Unfortunately, redundancy, annual leave and superannuation payments are often treated as unsecured, interest-free loans by employers, usually without workers knowledge,’ Oliver said.
Funds are unsecured loan
‘But if their employer goes broke and is put into liquidation, there is no guarantee the workers will be paid back in full because the loan is unsecured.’
Oliver said that often the workers most at risk of losing their entitlements are the ones with most to lose.
‘They are the older, long-serving employees with little in the way of superannuation savings,’ he said.
‘That is why the AMWU is calling for a new system of income protection that guarantees 100% of accumulated employee entitlements.’
New system proposed
Oliver said such a system could involve:
  • a universal insurance scheme to cover employee entitlements, which could be developed and managed nationally or industry by industry
  • a pay-as-you-go contribution plan as exists in industries like building and construction
  • legislation that ranks employee entitlements above secured creditors.
‘Until a new system is put in place, the government’s current scheme (GEERS) should pay out 100% of employee entitlements,’ Oliver said.
‘We are also calling for harsher penalties for employers who strip company assets and effectively steal employee entitlements for their own benefit.’
Current redundancy scheme
Currently, the GEERS scheme pays:
  • up to three months unpaid wages for the period prior to the appointment of the insolvency practitioner (including amounts deducted from your wages such as for superannuation, but not passed on to your superannuation fund)
  • all unpaid annual leave
  • all unpaid long-service leave
  • all unpaid payment in lieu of notice
  • up to a maximum of 16 weeks unpaid redundancy entitlement
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