Fair Entitlements Guarantee Act 2012

Each provision of this Act specified in column 1 of the table commences, or is taken to have commenced, in accordance with column 2 of the table. Any other statement in column 2 has effect according to its terms.

This table relates only to the provisions of this Act as originally enacted. It will not be amended to deal with any later amendments of this Act.

Any information in column 3 of the table is not part of this Act. Information may be inserted in this column, or information in it may be edited, in any published version of this Act.

to provide for the Commonwealth to pay advances on account of unpaid employment entitlements of former employees of employers in cases where:

the employers are insolvent or bankrupt; and

the end of the employment of the former employees was connected with that insolvency or bankruptcy; and

the former employees cannot get payment of the entitlements from other sources; and

to allow 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.

This section is a simplified outline of this Act.

Under Part 2, a person is eligible for financial assistance under this Act (called an advance) if:

the person’s employment by an employer has ended; and

the employer is being wound up or bankrupt; and

the end of the employment is connected with the insolvency or bankruptcy of the employer; and

the person has not been fully paid his or her entitlements relating to that employment; and

the person has made a claim for the advance.

A person’s claim for an advance is decided by the Secretary, who also decides the amount of the advance if the person is eligible for it (see section 15).

Part 3 explains how to work out the amount of an advance for a person, taking account of the person’s unpaid entitlements relating to unused annual leave, unused long service leave, payment in lieu of notice, redundancy pay and wages for a 13‑week period. The amount may be reduced because:

the person owes debts to his or her employer; or

the liquidator or bankruptcy trustee expects to be able to pay those entitlements in full soon.

Part 4 deals with payment of an advance by the Commonwealth, either:

directly to the person eligible for the advance; or

to the liquidator, the bankruptcy trustee or another intermediary who will pass it on to the person.

Part 5 lets the Commonwealth recover some or all of the advance, by:

substituting the Commonwealth for the person eligible for the advance as a creditor in the winding up or bankruptcy of the employer; and

requiring the person to pay the Commonwealth if he or she is later paid amounts for the entitlements the advance related to.

Part 6 deals with administrative matters, including:

review of decisions made by the Secretary on eligibility for advances and amounts of advances (see Division 2 of Part 6); and

use and disclosure of personal information in connection with the administration of the Act (see Division 3 of Part 6).

Part 7 deals with various matters, including:

letting the Secretary extend the scheme for advances to persons whose employment has ended and whose employer is in administration under the Corporations Act 2001; and

allowing regulations to provide for other schemes of financial assistance for persons who worked as contractors (rather than employees) but have not been paid because of the insolvency or bankruptcy of the persons they worked for.

by taking possession or control of property; or

by operation of law.

applying of its own force; or

applying, with or without modifications, because of a law of the Commonwealth, a State or a Territory.

applying of its own force; or

applying, with or without modifications, because of a law of the Commonwealth, a State or a Territory.

of the winding up of an employer—means:

an expense that relates to the winding up and is described in paragraph 556(1)(a) of the Corporations Act 2001; or

an amount described in section 558 of that Act as a cost of the winding up; or

of the bankruptcy of an employer—means:

an expense that relates to the bankruptcy and is described in paragraph 109(1)(a) of the Bankruptcy Act 1966; or

an amount described in section 109A of that Act as a cost of the bankruptcy.

Paragraph 556(1)(a) of the Corporations Act 2001 describes expenses incurred by a liquidator or administrator in carrying on a company’s business, among other things. Paragraph 109(1)(a) of the Bankruptcy Act 1966 describes expenses of the administration of the bankruptcy, among other things.

annual leave entitlement; or

long service leave entitlement; or

payment in lieu of notice entitlement; or

redundancy pay entitlement; or

wages entitlement.

a written law of the Commonwealth, a State or a Territory;

an award, determination or order that is made or recorded in writing;

a written instrument;

an agreement (whether a contract or not).

when a liquidator of the employer is appointed (provisionally or otherwise) under the Corporations Act 2001; 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 in paragraph (a) or (b) happens, or has happened, to all of the partners by whom the person is or was employed.

If a person is employed for a partnership by 2 partners, one of whom becomes bankrupt on 15 October 2013 and the other of whom becomes bankrupt on 1 November 2013, the insolvency event happens on 1 November 2013 (because that is the first time when both the partners have become bankrupt).

a liquidator of the employer; or

an administrator of the employer appointed under the Corporations Act 2001; or

a restructuring practitioner for the employer appointed under that Act; or

a person appointed as a receiver of property of the employer; or

a person who has possession or control of property of the employer for the purpose of enforcing:

a charge; or

a mortgage; or

a lien; or

a pledge; or

a security interest, within the meaning of the Personal Property Securities Act 2009, to which that Act applies, other than a transitional security interest within the meaning of that Act; or

a bankruptcy trustee of the employer.

$2,364.00; or

the result of indexation of the amount in paragraph (a), or of the result of the last application of this paragraph, in accordance with the regulations, by reference to estimates of full‑time adult average weekly ordinary time earnings published by the Australian Statistician.

the time the person’s employment ended;

the first time an insolvency practitioner (other than a restructuring practitioner within the meaning of the Corporations Act 2001) has power (however expressed) to control or manage employment by:

the employer; or

if the person was employed for a partnership by 2 or more partners—any of the partners who employed the person.

This section defines the various kinds of employment entitlements of a person whose employment by an employer has ended, by reference to the person’s entitlements under the governing instrument for the employment.

Part 3 may affect the calculation of the person’s employment entitlements for the purposes of working out the amount of an advance the person is eligible for.

The person’s annual leave entitlement is the amount the person is entitled to under the governing instrument from the employer for paid annual leave that the person:

had accrued at the end of the employment; and

had not taken by then.

The person’s long service leave entitlement is the amount the person is entitled to under the governing instrument from the employer:

for long service leave that the person had accrued at the end of the person’s employment and had not taken by then; or

on account of long service leave that, had the person’s employment continued until the person qualified for long service leave, would have been attributable to the period before the actual end of the person’s employment.

The person’s payment in lieu of notice entitlement is the amount the person is entitled to under the governing instrument from the employer for a shortfall in the period of notice of termination of the employment.

The person’s redundancy pay entitlement is the amount of redundancy pay the person is entitled to under the governing instrument from the employer for termination of the employment.

The person’s wages entitlement is the amount of wages the person is entitled to under the governing instrument from the employer for work done, or paid leave taken, in the wages entitlement period.

The person’s receipt of some or all of an amount he or she was entitled to under the governing instrument does not affect what is the person’s annual leave entitlement, long service leave entitlement, payment in lieu of notice entitlement, redundancy pay entitlement or wages entitlement under this section.

If:

under the governing instrument, the person accrued 8 weeks of annual leave that had not been taken by the end of the person’s employment; and

the employer paid the person for 3 of those weeks;

Wages includes the following:

allowances;

loadings;

amounts payable for overtime;

amounts payable at penalty rates;

other amounts that the governing instrument for the relevant employment identifies separately and makes payable regularly.

However, the following are not wages:

discretionary payments (such as bonuses);

reimbursements;

payments of expenses relating to travel or relocation.

Amounts that are not payable on an ongoing basis are not wages, unless they are amounts described in subsection (1).

The Minister may, by legislative instrument, make rules prescribing modifications of this Act or the regulations for their application in relation to Norfolk Island.

To avoid doubt, the rules may not do the following:

create an offence or civil penalty;

provide powers of:

arrest or detention; or

entry, search or seizure;

impose a tax;

set an amount to be appropriated from the Consolidated Revenue Fund under an appropriation in this Act;

directly amend the text of this Act or the regulations.

If the rules prescribe modifications of this Act or the regulations for their application in relation to Norfolk Island, then this Act or the regulations have effect as so modified in relation to Norfolk Island.

This Act and the regulations would, in the absence of any such rules, apply in relation to Norfolk Island in the same way as they apply in relation to the rest of Australia.

A person is eligible for an advance if the Secretary is satisfied of all of the following:

the person’s employment by a particular employer has ended;

after the commencement of this section, an insolvency event happened to the employer;

the end of the employment:

was due to the insolvency of the employer; or

occurred less than 6 months before the appointment of an insolvency practitioner for the employer; or

occurred on or after the appointment of an insolvency practitioner for the employer;

the person is (or would, apart from the discharge of the bankruptcy of the employer, be) owed one or more debts wholly or partly attributable to all or part of one or more employment entitlements;

the person has taken steps, so far as reasonable, to prove those debts in the winding up or bankruptcy of the employer;

if the person was owed any of those debts before the insolvency event happened, the person took reasonable steps before that event to be paid those debts;

when the employment ended, the person was an Australian citizen or, under the Migration Act 1958, the holder of a permanent visa or a special category visa;

an effective claim (see section 14) that the person is eligible for the advance has been made to the Secretary by or on behalf of the person.

Subdivision B excludes certain persons from eligibility.

If the person was employed for a partnership by 2 or more of the partners, paragraphs (1)(c), (d) and (e) apply as if each reference in those paragraphs to the employer were a reference to each of the partners who employed the person.

A person is not eligible for an advance for the person’s employment by an employer if:

section 556 of the Corporations Act 2001 applies to the winding up of the employer; and

the person is an excluded employee under that section in relation to the employer.

A person is not eligible for an advance for the person’s employment by an employer who is or was a bankrupt under the Bankruptcy Act 1966 if:

the person is a relative (as defined in the Corporations Act 2001) of the employer; or

the person was a spouse or de facto partner (within the meaning of the Acts Interpretation Act 1901) of the employer at any time within the 12 months ending on the date of the bankruptcy (as defined in the Bankruptcy Act 1966) of the employer.

A person who was employed for a partnership by 2 or more of the partners is not eligible for an advance for that employment if the conditions in subsection (1), or any of the conditions in subsection (2), exist in relation to any of the partners who employed the person.

This section has effect despite section 10.