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Fair Entitlements Guarantee: An Explainer

Fair Entitlements Guarantee: An Explainer

Has your employer become bankrupt or gone into liquidation? Find out here whether you are eligible for compensation under the Fair Entitlements Guarantee.

15th April 2019

Naturally, it is stressful if your employer files for bankruptcy or liquidation. Not only do you have a new employer, you may be out of pocket due to unpaid employee entitlements. You may be eligible for compensation from the government under the Fair Entitlements Guarantee (FEG). Read on to find out what you need to know, and whether the FEG could apply to you.

What is the Fair Entitlements Guarantee?

The FEG is a government funded assistance that is designed to protect employees from the consequences of businesses who are unable to pay employee entitlements. The government will provide you with a degree of financial compensation based on the amount of your entitlements. Importantly, the FEG only applies to Australian citizens, holders of permanent visas or special category visa holders. If you are unsure about whether your visa status makes you eligible, get in touch with a visa lawyer.  

Am I eligible for the Fair Entitlements Guarantee?

There are several criteria you will have to meet to be eligible for the FEG. Firstly, you will need to lodge your claim within twelve months of the business’s cessation of operations or you losing your job. Secondly, you lost your job due to your employer’s bankruptcy or liquidation, or up to six months prior. Finally and most importantly, you are owed one of the following entitlements:

  • Unpaid wages (up to 13 weeks)
  • Unpaid long service or annual leave
  • Payment in lieu of notice (up to 5 weeks)
  • Redundancy pay

Therefore, you are not eligible if you were a contractor or director of the business that ceased because of liquidation or bankruptcy. For further information, click here.

How do I make a claim?

To make a claim, you will need to go to make an online claim with FEG online services. You will need to provide relevant information that will prove your room. The information you will be required to give includes your contract of employment, details about your former employer and other documents to confirm your eligibility. Importantly, if your former employer was a sole trader or partnership, you will need to claim before they are discharged from bankruptcy.

Conclusion

Therefore, if your employer becomes bankrupt or goes into liquidation, you may still be able to recover unpaid employee entitlements. Crucially, make sure your claim is within twelve months of the cessation of operations by your former employer or you losing your job. Otherwise, you will not be eligible for the Fair Entitlements Guarantee. If you are unsure about your claim get in touch with an employment lawyer for legal advice relevant to you.

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Author
Lachlan Ward

Lachlan is an intern at Lawpath as part of the content team. He is currently studying a Juris Doctor at the University of Sydney. Lachlan has a keen interest in corporate law and commercial litigation.