Fair Entitlements Guarantee (Rex Airlines Pty Ltd in Administration) Declaration 2024

Administered by Department of Employment and Workplace Relations

Legislation au F2024L01440 In force Legislative Instrument

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FAIR ENTITLEMENTS GUARANTEE (REX AIRLINES PTY LTD 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

 

Purpose and operation of the Instrument

 

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 Rex Airlines Pty Ltd (Administrators Appointed) A.C.N. 642 400 048 which is an entity 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 to an employer:

  • when a liquidator of the employer is appointed (provisionally or otherwise) under the Corporations Act; or
  • when the employer becomes a bankrupt under the Bankruptcy Act 1966; or
  • if the person is or was employed for a partnership by 2 or more of the partners - at the first time an event described above happens, or has happened, to all of the partners by whom the person is or was employed

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 Rex Airlines Pty Ltd (Administrators Appointed) 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 Rex Airlines Pty Ltd (Administrators Appointed) 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 Rex Airlines Pty Ltd.

REGULATion IMPACT STATEMENT

The Office of Impact Analysis was consulted regarding this instrument and indicated that a detailed Impact Analysis was not required (OIA24-07890).

 

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

 

Fair Entitlements Guarantee (Rex Airlines Pty Ltd in Administration) Declaration 2024

 

The Fair Entitlements Guarantee (Rex Airlines Pty Ltd 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.

 

Overview of the Legislative Instrument

 

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 Rex Airlines Pty Ltd (Administrators Appointed) which is an entity 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.

 

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.

The effect of the declaration is that the Act applies to former employees of Rex Airlines Pty Ltd (Administrators Appointed) 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 Rex Airlines Pty Ltd (Administrators Appointed) to make a claim under the Act and have their claims for an advance assessed and paid in accordance with the Act.

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 Act 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.

 

 

 

Senator the Hon Murray Watt

 

Minister for Employment and Workplace Relations

 

 

 

 

 

 

 

 

 

 

Attachment A

NOTES ON SECTIONS

Section 1 – Name

Section 1 provides that the title of the instrument is the Fair Entitlements Guarantee (Rex Airlines Pty Ltd in Administration) Declaration 2024.

Section 2 – Commencement

Section 2 provides that the instrument commences on the day after it is registered on the Federal Register of Legislation.

Section 3 – Authority

Section 3 provides that the instrument is made under section 49 of the Fair Entitlements Guarantee Act 2012.

Section 4 – Declaration

Section 4 declares that the Fair Entitlements Guarantee Act 2012 applies in relation to persons who were employed, but are no longer employed, by Rex Airlines Pty Ltd (Administrators Appointed) which is an entity in administration under the Corporations Act 2001.

[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 (Rex Airlines Pty Ltd in Administration) Declaration 2024 was enacted to address a gap in the Fair Entitlements Guarantee Act 2012, which did not cover employees of companies in administration under Part 5.3A of the Corporations Act 2001. This legislative instrument aims to extend the protections of the Fair Entitlements Guarantee Act to former employees of Rex Airlines Pty Ltd, which is currently under administration. The declaration was made under section 49 of the Fair Entitlements Guarantee Act 2012 by the Minister for Employment and Workplace Relations, ensuring that former employees of Rex Airlines Pty Ltd can now claim for their unpaid entitlements, thereby providing a safety net in cases of employer insolvency or bankruptcy. The instrument was developed following consultations with the relevant insolvency practitioner and a review by the Office of Impact Analysis, which found that a detailed impact analysis was not necessary. The declaration is compatible with human rights, specifically the right to social security as articulated in the International Covenant on Economic, Social and Cultural Rights. It takes effect on the day after its registration on the Federal Register of Legislation and is not exempt from sunsetting under the Legislation Act 2003. This declaration seeks to ensure that former employees of Rex Airlines Pty Ltd can access the financial assistance provided by the Fair Entitlements Guarantee Act 2012, thereby protecting them from the lack of work-related income caused by the insolvency of their employer.

Scope and Application

The Fair Entitlements Guarantee (Rex Airlines Pty Ltd in Administration) Declaration 2024 serves to extend the application of the Fair Entitlements Guarantee Act 2012 to former employees of Rex Airlines Pty Ltd, which is under administration under Part 5.3A of the Corporations Act 2001. Typically, the Act applies to employees of employers who have entered liquidation or bankruptcy, but not to those whose employers are in administration. This declaration fills that gap, enabling former employees of Rex Airlines Pty Ltd to make claims under the Act. The instrument applies to all individuals who were employed by Rex Airlines Pty Ltd at the time of its administration and have since ceased employment with the airline. The declaration allows these individuals to seek financial assistance for unpaid work-related entitlements through the scheme established by the Fair Entitlements Guarantee Act 2012. This legislation is a Commonwealth instrument and thus has national jurisdiction, providing a safety net for employees facing financial hardship due to their employer's insolvency or bankruptcy.

Key Provisions

The Fair Entitlements Guarantee (Rex Airlines Pty Ltd in Administration) Declaration 2024, primarily enacted under section 49 of the Fair Entitlements Guarantee Act 2012, serves to extend the scope of the Act to include former employees of Rex Airlines Pty Ltd (Administrators Appointed), which is currently under administration as per Part 5.3A of the Corporations Act 2001. Ordinarily, the Act does not apply to employees whose employer is in administration, but this declaration specifically rectifies that oversight. The Act's primary function is to provide financial assistance to workers who have not been fully compensated for their work due to the insolvency or bankruptcy of their employer. Section 10 of the Act outlines the eligibility criteria for an individual to receive an advance, one of which is the occurrence of an ‘insolvency event’ as defined in section 5. This event includes the appointment of a liquidator, the employer becoming bankrupt, or specific circumstances involving partnerships, but it excludes employers in administration. By declaring that the Act applies to Rex Airlines Pty Ltd, the Minister ensures that former employees can now make claims under the Act, thereby receiving the financial support they are entitled to. The obligations and requirements imposed by the Act on the parties involved are primarily centred around the administration and application of the Act's provisions. The Minister for Employment and Workplace Relations must consult with the relevant insolvency practitioner to ensure that the creditors of Rex Airlines Pty Ltd are expected to resolve to wind up the employer, and that it will be practicable to administer the Act in this context. The Act requires the former employees of Rex Airlines Pty Ltd to meet the eligibility criteria, including demonstrating that they were employed by the company and that an ‘insolvency event’ has occurred. The insolvency practitioner, on the other hand, must cooperate with the Minister and ensure that the declaration is made in a manner that allows for the smooth administration of the Act. Essentially, all parties must adhere to the Act's stipulations to ensure that the financial assistance scheme operates effectively. In terms of breaches and penalties, the Fair Entitlements Guarantee Act 2012 does not explicitly outline specific offences or penalties for non-compliance with the Act itself. However, any fraudulent claims or misrepresentations made in the process of applying for an advance could potentially lead to criminal charges under other relevant legislation, such as the Criminal Code Act 1995. The penalties for such offences could range from fines to imprisonment, depending on the severity of the fraud. Additionally, the failure to meet the obligations set forth by the Act could lead to civil consequences, such as the requirement to repay any improperly received advances. While the Act itself does not specify maximum penalties, the overarching legal framework ensures that there are significant repercussions for any breaches.

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Sourced from the Federal Register of Legislation at 26 August 2026. For the latest information on Australian Government law please go to https://www.legislation.gov.au.