What happens to employee entitlements which cannot be paid by the company?

The Fair Entitlements Guarantee (FEG) scheme is operated by the Federal Government in Australia. The scheme provides for certain employee entitlements to be paid if the company is placed into liquidation. FEG is not catered for in Voluntary Administration (VA) unless the company is placed into liquidation after the VA period is ended. Employee entitlements covered by FEG include:

  • Unpaid wages with a ceiling or limit up to 13 weeks;
  • Unpaid annual leave and long service leave;
  • Payment in lieu of notice;
  • Redundancy pay if the company has more than 15 employees.

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