Fair Entitlements Guarantee (Extended operation of the Act in relation to GEON in Administration) Declaration 02/2013

Overview

The Fair Entitlements Guarantee Act 2012 was enacted to address the problem of workers not being fully paid for work done when their employer becomes insolvent or bankrupt. The Act creates a scheme to provide financial assistance to affected workers. This Act was introduced by the Commonwealth Parliament, aiming to ensure that employees receive their unpaid entitlements even when their employer cannot meet these obligations due to insolvency or bankruptcy. The Fair Entitlements Guarantee (Extended operation of the Act in relation to GEON in Administration) Declaration 02/2013 extends the application of the Act to former employees of GEON Australia Pty Ltd and related entities, which are under administration under the Corporations Act 2001. The policy objective is to provide a safety net for these workers, ensuring they can access their unpaid employment entitlements. This extension was made to support the right to social security, as recognised under Article 9 of the International Covenant on Economic, Social and Cultural Rights.

Scope and Application

The Fair Entitlements Guarantee (Extended operation of the Act in relation to GEON in Administration) Declaration 02/2013 extends the application of the Fair Entitlements Guarantee Act 2012 to cover former employees of GEON Australia Pty Ltd, GEON DM and Mailing Services Pty Ltd, and GEON Group Australia Pty Ltd, which are entities currently under administration under Part 5.3A of the Corporations Act 2001. This extension is significant as it allows former employees of these companies to access the financial assistance scheme provided by the Act, which is otherwise reserved for employees of insolvent or bankrupt employers. The declaration was made upon the satisfaction of the Minister for Employment and Workplace Relations that the creditors of GEON are expected to resolve at a meeting convened under section 439A of the Corporations Act to wind up the employer and that it is practicable to administer the Act due to this declaration. Consequently, the Act applies to these former employees as if a liquidator had been appointed at the time of the administrator's appointment. This ensures that eligible former employees can make a claim and receive an advance for unpaid employment entitlements, thereby providing a safety net against the loss of work-related income due to their employer's insolvency.

Key Provisions

The Fair Entitlements Guarantee Act 2012 (the Act) provides financial assistance to workers who have not been fully paid for their work due to their employer’s insolvency or bankruptcy. Specifically, section 10 of the Act establishes the eligibility criteria for an individual to receive an advance, which includes the condition that an 'insolvency event' must have occurred with their employer. An 'insolvency event', as defined in section 5, is when a liquidator is appointed to the employer, but it does not encompass the employer being under administration under the Corporations Act 2001. Section 49 of the Act allows the Minister to extend the operation of the Act to employees of an employer in administration under the Corporations Act, if certain conditions are met. The obligations under the Act are primarily focused on the timely and fair payment of employees' entitlements. For the Act to apply to employees of an employer in administration, the Minister must be satisfied that the creditors are likely to resolve to wind up the employer and that it will be practicable to administer the Act in relation to the specified employer. In this instance, the Fair Entitlements Guarantee (Extended operation of the Act in relation to GEON in Administration) Declaration 02/2013 was made to extend the operation of the Act to former employees of GEON. The effect of this declaration is that the Act applies to these employees as if the relevant administrator were a liquidator appointed when the administrator was appointed. Failure to comply with the provisions of the Act, or the declaration, could result in civil or criminal consequences, although specific penalties are not detailed within the explanatory statement. The Act and the declaration aim to ensure that employees receive their unpaid entitlements, thus providing a safety net against income loss due to employer insolvency. The human rights implications of the Act are considered to be positive, as it supports the right to social security and access to benefits without discrimination, as outlined in Article 9 of the International Covenant on Economic, Social and Cultural Rights. The declaration ensures that employees of an employer in administration are not excluded from these protections. In summary, the Fair Entitlements Guarantee Act 2012 and the associated declaration aim to safeguard employees’ unpaid entitlements in the event of their employer’s insolvency or administration. The Act requires that an 'insolvency event' must occur for an employee to be eligible for an advance, and section 49 allows the Minister to extend the Act’s operation to employees of an employer in administration under certain conditions. The declaration ensures that employees of GEON, an employer in administration, can make claims and receive advances if eligible. While the explanatory statement does not specify penalties for non-compliance, the overarching aim is to provide a safety net for employees against income loss due to employer insolvency.