Bankruptcy & liquidation
Sometimes businesses shut down because they aren't profitable or run out of money. This can mean that employees lose their jobs, and in some cases, the employer may not able to pay them the wages and entitlements they are owed.
When a business is bankrupt, also known as going into liquidation or insolvency, employees can get help through the Fair Entitlements Guarantee (FEG).
The FEG, previously known as the General Employee Entitlements and Redundancy Scheme or GEERS, is available to eligible employees to help them get their unpaid entitlements. This can include:
- wages – up to 13 weeks of unpaid wages (capped at the FEG maximum weekly wage)
- annual leave
- long service leave
- payment in lieu of notice of termination – maximum of 5 weeks
- redundancy pay – up to 4 weeks per full year of service.
It doesn’t include:
- reimbursement payments
- one-off or irregular payments
- bonus payments
- non-ongoing or irregular commissions.
Before a business goes bankrupt
Before a business goes bankrupt it might go into voluntary administration. Voluntary administration happens when a business can't pay its debts. An administrator is appointed to work out if the business can keep operating or should go into liquidation.
When a business is in voluntary administration (before it goes into bankruptcy or liquidation) we can provide advice and help employees get entitlements that haven't been paid.
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