When a business collapses, employees often face uncertainty about unpaid wages, leave entitlements, and redundancy payments. Fortunately, the Australian Government’s Fair Entitlements Guarantee (FEG) exists to provide a safety net for eligible employees affected by their employer’s insolvency. In this article, we’ll explore how the FEG works, who can claim it, and the steps involved in making a claim.
What Is the Fair Entitlements Guarantee (FEG)?
The Fair Entitlements Guarantee (FEG) is a government scheme designed to assist employees who have lost their jobs due to their employer’s insolvency. It provides financial support to cover certain unpaid employment entitlements, helping affected workers manage the transition after losing their job.
FEG applies when an employer has gone into liquidation or bankruptcy, and there are no remaining company funds to pay employees what they are owed.
Who Can Claim FEG?
To be eligible for assistance under FEG, an employee must meet the following criteria:
- Employment Type: The claimant must have been an Australian citizen, permanent resident, or holder of a special category visa at the time of losing their job.
- Employer’s Status: The employer must have entered liquidation or bankruptcy.
- Timeframe: The employee must have lodged their claim within 12 months of losing their job or within 12 months of their employer’s liquidation or bankruptcy (whichever is later).
- Genuine Employee: The claimant must have been working as an employee, not as a contractor.
- Not an Excluded Employee: Directors of the company and their close relatives may not be eligible.
What Does FEG Cover?
FEG provides assistance for the following unpaid entitlements:
- Unpaid wages (up to 13 weeks)
- Annual leave
- Long service leave
- Payment in lieu of notice (up to five weeks)
- Redundancy pay (up to four weeks per year of service)
FEG does not cover superannuation, bonuses, commissions, reimbursement for expenses, or other benefits outside standard entitlements.
How to Apply for FEG
If you believe you are eligible, follow these steps to apply for the Fair Entitlements Guarantee:
- Check Your Eligibility
Review the criteria to ensure you meet the requirements before applying. - Gather Required Documents
You will need documents such as:- Proof of employment (employment contract, payslips, termination letter)
- Bank statements showing unpaid wages
- Communication from the liquidator confirming insolvency
- Submit an Online Claim
Claims are submitted through the FEG Online Services portal on the Australian Government’s website. Paper applications are available if needed. - Wait for Assessment
The Department of Employment and Workplace Relations assesses claims. Processing times may vary, but most claims take around 16 weeks. - Receive Payment
If approved, FEG payments are made directly to your bank account.
Additional Considerations
- Redundancy Payments: If you received a redundancy payment from another source (such as a union fund), it might affect your FEG entitlement.
- Legal Assistance: If there are disputes about your claim, seeking legal or financial advice may help.
- Superannuation: Although FEG does not cover unpaid superannuation, employees can contact the Australian Taxation Office (ATO) for assistance in recovering unpaid super contributions.
Conclusion
Losing a job due to insolvency is stressful, but the Fair Entitlements Guarantee (FEG) offers financial relief to help affected employees reclaim their unpaid entitlements. Understanding the eligibility criteria, claim process, and what is covered can make the process smoother and ensure that employees receive the support they are entitled to.
If you or someone you know has been affected by an employer’s insolvency, take action quickly to claim what is rightfully yours under the FEG scheme. For more information and to apply, visit the Australian Government’s Fair Entitlements Guarantee website.
