Fair Entitlements Guarantee Act 2012
No. 159, 2012
Compilation No. 5
Compilation date: 21 February 2025
Includes amendments: Act No. 14, 2025
About this compilation
This compilation
This is a compilation of the Fair Entitlements Guarantee Act 2012 that shows the text of the law as amended and in force on 21 February 2025 (the compilation date).
The notes at the end of this compilation (the endnotes) include information about amending laws and the amendment history of provisions of the compiled law.
Uncommenced amendments
The effect of uncommenced amendments is not shown in the text of the compiled law. Any uncommenced amendments affecting the law are accessible on the Register (www.legislation.gov.au). The details of amendments made up to, but not commenced at, the compilation date are underlined in the endnotes. For more information on any uncommenced amendments, see the Register for the compiled law.
Application, saving and transitional provisions for provisions and amendments
If the operation of a provision or amendment of the compiled law is affected by an application, saving or transitional provision that is not included in this compilation, details are included in the endnotes.
Editorial changes
For more information about any editorial changes made in this compilation, see the endnotes.
Modifications
If the compiled law is modified by another law, the compiled law operates as modified but the modification does not amend the text of the law. Accordingly, this compilation does not show the text of the compiled law as modified. For more information on any modifications, see the Register for the compiled law.
Self‑repealing provisions
If a provision of the compiled law has been repealed in accordance with a provision of the law, details are included in the endnotes.
Contents
Part 1—Preliminary
1 Short title
2 Commencement
3 Objects of this Act
4 Simplified outline of this Act
5 Definitions
6 Kinds of employment entitlements
7 Wages
8 This Act binds the Crown
9 Extraterritorial operation
9A Rules may modify application of this Act in Norfolk Island
Part 2—Eligibility for advance
Division 1—Conditions of eligibility for advance
Subdivision A—Basic conditions of eligibility
10 Conditions of eligibility for advance
Subdivision B—Exclusions from eligibility
11 Exclusion for personal connection with employer
12 Exclusion for being newly employed after working as contractor
13 Exclusion for employment by certain employers
Division 2—Claim for eligibility for advance
14 Making an effective claim
15 Secretary must decide effective claim
Part 3—Amount of advance
Division 1—Working out the amount of an advance
16 General rule for working out the amount of an advance
17 Reduction for the person’s debts to the employer
18 Nil amount if liquidator or bankruptcy trustee can fully pay entitlements soon
Division 2—Amounts for employment entitlements
Subdivision A—Working out amounts for employment entitlements
19 Working out amounts for employment entitlements
Subdivision B—General rules for basic amounts for employment entitlements
20 Basic amount for annual leave entitlement
21 Basic amount for long service leave entitlement
22 Basic amount for payment in lieu of notice entitlement
23
Overview
The Fair Entitlements Guarantee Act 2012, enacted on 28 November 2012, addresses the issue of workers not being fully paid for their work when their employers become insolvent or bankrupt. This Act was passed by the Australian Parliament to provide financial assistance for workers in such cases, allowing them to receive advances on their unpaid employment entitlements. The primary objective of the Act is to ensure that workers who have not been fully paid due to their employer's insolvency or bankruptcy receive the financial assistance they are entitled to, thereby providing a safety net for affected employees. The Act also allows the Commonwealth to recover the advances through the winding up or bankruptcy of the employers and from other payments the former employees receive for the entitlements.
Scope and Application
The Fair Entitlements Guarantee Act 2012 provides financial assistance, referred to as an advance, to eligible workers who have not been fully compensated for their employment entitlements due to their employer's insolvency or bankruptcy. The Act applies to employees who have had their employment terminated, provided the termination was connected with the insolvency or bankruptcy of the employer and the worker has not received full payment of their entitlements from other sources. The Act applies to all states and territories of Australia and has extraterritorial operation, extending to payments made to and recovery of amounts from persons outside Australia. The Act does not apply to certain individuals, such as those with a personal connection to the employer, those who were employed by certain specified employers under the Special Employee Entitlements Scheme for Ansett Group Employees, and those who began employment within six months of the employer’s insolvency or bankruptcy if it was reasonable to expect the employer would not meet their obligations. The Act may be modified for its application in Norfolk Island by legislative instruments, though these cannot create offences or provide powers of arrest or detention, among other restrictions. The Act binds the Crown in each of its capacities and extends to payments made to, and recovery of amounts from, persons outside Australia. The Act also provides for the making of regulations to establish schemes for financial assistance to individuals who worked as contractors but were not paid due to the insolvency of the person they worked for.
Key Provisions
- The Fair Entitlements Guarantee Act 2012 (the Act) provides financial assistance to employees who have not been fully paid for their work due to the insolvency or bankruptcy of their employer. Under the Act, eligible employees can receive an advance, which is essentially a payment from the Commonwealth to cover unpaid employment entitlements. The Act outlines the conditions for eligibility, the process for calculating the amount of the advance, and the mechanisms for its payment and recovery. The Act's main provisions include eligibility criteria for the advance (Sections 10-13), the process for making a claim (Sections 14-15), the calculation of the advance amount (Sections 16-27), payment procedures (Section 28), and recovery of the advance (Sections 29-34). The Act imposes obligations on the Secretary to determine eligibility and the amount of the advance, and on the Commonwealth to pay and recover the advance. It also sets out civil and criminal penalties for non-compliance, including the potential for fines and imprisonment, though specific penalties are not detailed in the Act itself but may be found in related legislation.
- The Act imposes several obligations on the parties it governs. Firstly, it requires the Secretary to assess the eligibility of employees for the advance and to determine the amount of the advance to be paid. This involves verifying that the employee meets the eligibility criteria, such as being owed unpaid employment entitlements due to the insolvency or bankruptcy of the employer. Secondly, the Act mandates that the Secretary must notify the employee of the decision regarding their eligibility and the amount of the advance, including the reasons for the decision and the employee's right to review the decision. Thirdly, the Act outlines the procedures for the payment of the advance, which can be made directly to the employee or through an intermediary, such as a liquidator or bankruptcy trustee. Fourthly, it imposes a duty on the Commonwealth to recover the advance through the winding up or bankruptcy of the employer and from other payments the employee receives for the entitlements.
- The Act provides for various offences and penalties for breaches, though the specifics of these are not detailed within the Act but are found in related legislation. Generally, breaches of the Act could result in civil or criminal penalties, including fines and imprisonment. For instance, failure to comply with the requirements for recovering the advance could result in civil penalties, while more serious breaches, such as fraudulent claims, could lead to criminal charges. The exact penalties would be determined according to the severity of the breach and would be governed by other applicable laws.
- Area of Law
- Employment & Labour Law
- Commercial Law
- Instrument
- Act
- Concepts
- Definitions & Interpretation
- Commencement Provisions
- Civil Penalty Provisions
- Licensing & Registration
- Reporting & Disclosure Obligations
- Enforcement Powers
- Compliance Obligations