An employee may be entitled to redundancy pay by an employer if their employment is terminated because of the liquidation or bankruptcy of the employer.
In some circumstances, the business may not have sufficient funds to pay employees' outstanding termination entitlements, including redundancy pay.
GEERS - the General Employee Entitlements and Redundancy Scheme,is a government scheme helping employees who lose their job because of the liquidation or bankruptcy of their employer,and have outstanding employment entitlements.
Eligible employees may be able to gain GEERS assistance for:
- up to 3 months unpaid wages for the period prior to the appointment of the insolvency practitioner
- unpaid annual leave
- unpaid long service leave
- up to a maximum of 5 weeks unpaid payment in lieu of notice
- up to a maximum of 4 weeks unpaid redundancy entitlement per completed year of service.
Note: The maximum of four weeks redundancy pay per completed year of service applies to GEERS claims where the eligible claimant’s employer was subject to liquidation or bankruptcy on or after 1 January 2011.
A maximum of 16 weeks redundancy pay applied for GEERS claims where the eligible claimant’s employer was subject to liquidation or bankruptcy between 22 August 2006 and 31 December 2010.
GEERS assistance is calculated in accordance with an employee’s entitlements under legislation, an award, a statutory agreement or a written contract of employment. For example, all employees will not necessarily receive redundancy pay of 4 weeks per year of service – the assistance an employee receives will be based on the redundancy entitlement provided for in their legal instrument.