FAIR ENTITLEMENTS GUARANTEE (NATIONAL PROJECTS AND MAINTENANCE GROUP OF COMPANIES IN ADMINISTRATION) DECLARATION 2024
EXPLANATORY STATEMENT
Issued under the Authority of the Minister for Employment and Workplace Relations
under section 49 of the Fair Entitlements Guarantee Act 2012
The purpose of this instrument is to declare that the Fair Entitlements Guarantee Act 2012 (the Act) applies to persons who were employed, but are no longer employed by:
- National Projects Qld Pty Ltd (Administrators Appointed) - A.C.N. 652 810 618
- National Projects (WA) Pty Ltd (Administrators Appointed) - A.C.N. 652 507 536
- National Projects and Maintenance Pty Ltd (Administrators Appointed) - A.C.N. 165 833 901
- National Projects (ACT) Pty Ltd (Administrators Appointed) - A.C.N. 652 507 634
- NPM (VIC) Pty Ltd (Administrators Appointed) - A.C.N. 623 232 637
(together called the National Projects and Maintenance group of companies) which are entities under administration under Part 5.3A of the Corporations Act 2001 (the Corporations Act). The Act does not otherwise apply to persons whose former employer is in administration.
Legislative background
The Act creates a scheme to provide financial assistance for workers who have not been fully paid for work done for insolvents or bankrupts.
Section 10 of the Act sets out the conditions for an individual’s eligibility for an advance under the Act. One of the conditions is that an ‘insolvency event’ has happened to the person’s employer. An ‘insolvency event’, as defined in section 5 of the Act, happens when a liquidator of the employer is appointed (provisionally or otherwise) but does not include the employer in administration under Part 5.3A of the Corporations Act.
Section 49 of the Act allows the Minister to declare that the Act applies to persons who were employed, but are no longer employed, by a specified employer that is under administration under Part 5.3A of the Corporations Act if satisfied that:
- The employer’s creditors are expected to resolve at a meeting convened under section 439A of the Corporations Act that the employer be wound up; and
- If the declaration is made, it will be practicable to administer the Act as it will apply because of the declaration in relation to the specified employer.
Effect of the declaration
The effect of the declaration is that the Act applies to former employees of the National Projects and Maintenance group of companies as if the relevant administrator were a liquidator appointed when the administrator was appointed, and the reference to an ‘insolvency event’ in paragraph 14(2)(a) of the Act is a reference to this declaration being made.
This will allow any former employees of the National Projects and Maintenance group of companies to make a claim under the Act and have their claims for an advance assessed and paid in accordance with the Act.
Consultation
To be satisfied of the factors listed in subsection 49(2) of the Act, consultation was undertaken with the insolvency practitioner responsible for the administration of the National Projects and Maintenance group of companies.
Regulation Impact Statement
The Office of Impact Analysis was consulted regarding this instrument and indicated that a detailed Impact Analysis was not required (OIA24-07475).
The Declaration is a legislative instrument for the purposes of the Legislation Act 2003.
The Declaration takes effect on the day after it is registered on the Federal Register of Legislation.
This instrument is not exempt from sunsetting under the Legislation Act 2003.
Statement of Compatibility with Human Rights
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011
The Fair Entitlements Guarantee (National Projects and Maintenance Group of Companies in Administration) Declaration 2024 is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.
Human rights implications
Article 9 of the International Covenant on Economic, Social and Cultural Rights (the ICESCR) provides that, ‘the State Parties to the present Covenant recognise the right of everyone to social security, including social insurance.’ The Committee on Economic, Social and Cultural Rights has stated that the right to social security encompasses the right to access benefits, whether in cash or in kind, without discrimination in order to secure protection from lack of work-related income caused by unemployment.[1]
The Fair Entitlements Guarantee Act 2012 establishes an assistance scheme that is intended to operate as a safety net for persons whose employment has ended due to the insolvency of their employer. This safety net could be characterised as ‘social insurance’ because it ensures that employees’ unpaid entitlements are met when their employer enters liquidation or bankruptcy. It thus seeks to protect individuals from lack of work-related income due to unemployment.
This declaration expands the operation of the Act to an employer in administration under the Corporations Act 2001. The effect is advances of unpaid employment entitlements can be made to eligible former employees. This supports the right to access benefits in order to secure protection from lack of work-related income caused by unemployment.
Conclusion
This Declaration is compatible with human rights as it does not raise any human rights issues.
Tony Burke
Minister for Employment and Workplace Relations
[1] Committee on Economic, Social and Cultural Rights, General Comment 19, The Right to Social Security, U.N. Doc. E/C.12/GC/19 (2008)
Overview
The Fair Entitlements Guarantee (National Projects and Maintenance Group of Companies in Administration) Declaration 2024, issued under the Fair Entitlements Guarantee Act 2012, aims to extend the provisions of the Act to employees of the National Projects and Maintenance group of companies, which are currently under administration under the Corporations Act 2001. The declaration addresses a legislative gap where the Act does not otherwise apply to employees whose employers are in administration. This extension allows former employees of these companies to claim their unpaid entitlements under the Act, ensuring they receive financial assistance for work done before their employer entered administration. The declaration was issued by the Minister for Employment and Workplace Relations, who was satisfied that the necessary conditions for making the declaration were met, including the expectation that the creditors would resolve to wind up the employer. The policy objective is to provide a safety net for employees facing job loss due to insolvency or administration, thereby upholding their right to social security and protection from lack of work-related income.
Scope and Application
The Fair Entitlements Guarantee (National Projects and Maintenance Group of Companies in Administration) Declaration 2024, issued under section 49 of the Fair Entitlements Guarantee Act 2012, extends the Act's application to former employees of the National Projects and Maintenance group of companies, which are entities currently under administration under Part 5.3A of the Corporations Act 2001. Ordinarily, the Fair Entitlements Guarantee Act applies to provide financial assistance to workers whose employers have become insolvent or bankrupt, but it does not apply to employers in administration. This Declaration allows former employees of the specified companies to make claims under the Act for unpaid employment entitlements, treating the administrators as liquidators for the purposes of the Act. The Declaration is applicable to employees who were employed by National Projects Qld Pty Ltd, National Projects (WA) Pty Ltd, National Projects and Maintenance Pty Ltd, National Projects (ACT) Pty Ltd, and NPM (VIC) Pty Ltd. The geographical reach of this legislation is national, impacting employees across Australia. The Declaration ensures that former employees of these companies, which are under administration, can seek the financial assistance provided by the Act, thus extending the Act's protective scope to this specific group of insolvent employers.
Key Provisions
The Fair Entitlements Guarantee (National Projects and Maintenance Group of Companies in Administration) Declaration 2024 primarily serves to extend the coverage of the Fair Entitlements Guarantee Act 2012 (the Act) to former employees of the National Projects and Maintenance group of companies, which are currently under administration under Part 5.3A of the Corporations Act 2001 (the Corporations Act). This declaration allows the Act to apply to these employees as if their employer's administrators were liquidators, thereby making them eligible for financial assistance under the Act (sections 10 and 49). This extension is significant as it ensures that employees who would otherwise be excluded from the Act's provisions due to the nature of their employer's administration can still access the safety net provided by the Act.
The obligations imposed on the parties under this Declaration are primarily administrative in nature. The Fair Entitlements Guarantee Act 2012 sets out the conditions for eligibility for financial assistance, and these conditions must be met by the former employees of the National Projects and Maintenance group of companies. The Act requires that an 'insolvency event' has occurred, which in this case is defined as the declaration itself. Additionally, the Minister for Employment and Workplace Relations must be satisfied that the creditors of the employer will resolve to wind up the employer and that administering the Act under this declaration is practicable. These obligations ensure that the scheme operates efficiently and fairly, providing the intended support to affected employees.
There are no specific offences or penalties outlined in the Fair Entitlements Guarantee (National Projects and Maintenance Group of Companies in Administration) Declaration 2024 itself. However, any breaches of the Fair Entitlements Guarantee Act 2012, such as fraudulent claims or misrepresentation of facts to obtain an advance, could lead to criminal charges. Under section 18 of the Act, an individual can be fined up to $21,000 or imprisoned for up to two years, or both, for making a false or misleading statement to obtain an advance. Furthermore, civil consequences could include the recovery of wrongly paid amounts and potential legal costs. These provisions are designed to ensure the integrity and effectiveness of the financial assistance scheme.
In summary, the Fair Entitlements Guarantee (National Projects and Maintenance Group of Companies in Administration) Declaration 2024 extends the Act's protections to former employees of specified companies under administration, ensuring they can access financial assistance for unpaid entitlements. The obligations focus on the proper administration of the Act, and any breaches could lead to significant penalties, reinforcing the importance of the scheme's integrity. This declaration thus plays a crucial role in safeguarding employees' rights and ensuring they receive the support they are entitled to in the event of their employer's insolvency or administration.