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What is this resource?

This resource includes information about:

  • Making a claim to receive Fair Entitlement Guarantee (FEG) assistance; and
  • What to do if you are not entitled to apply for FEG assistance.  

As a result of cashflow issues, some businesses may be forced to close and liquidate to settle their debts. If your employer is already deregistered, there may still be steps you can take as an employee to make sure you get the payments you are owed.   

If you don’t know whether your employer is deregistered, you should have a look at our resource on “Pursuing an employer for payment when they are no longer trading”. 

Is this resource for me?  

This resource is written for you if you answer yes to all of the following questions: 

  I am an employee 

  My employer is a company 

  My employer is deregistered 

  I am owed payment from my employer 

Applying for FEG assistance

If your employer is liquidated, you may be able to recover some of your unpaid employment entitlements by making a claim with FEG.  

What is the Fair Entitlements Guarantee scheme?

FEG is a last resort scheme available to eligible employees to claim unpaid employment entitlements in one of the following situations:  

  • If you have lost your job because your employer, which is a company, is being liquidated; or  

  • If you have lost your job because your employer, who is a person, is bankrupt.  

Liquidation means that the employer company’s assets have been sold off to settle their debts, and they no longer have any assets with which to settle the debt they owe you. In most situations, companies that are deregistered will be liquidated.

Bankruptcy means the employer has legally declared that they are unable to pay their debts including the wages and entitlements you are owed. 

If your FEG claim is successful, the Federal Government will pay some of the entitlements owed to you by your former employer 

This could include:  

  • Unpaid wages up to 13 weeks (capped at $2,451 per week);

  • Outstanding leave entitlements;

  • Payment in lieu of notice for up to 5 weeks; and

  • Redundancy pay for up to 4 weeks per full year of service. 

It does not include the following: 

  • Superannuation;

  • Reimbursement payments, or one-off or irregular payments; or

  • Bonus payments or non-ongoing or irregular commissions.

Am I eligible to make a claim under FEG? 

Not everyone is eligible to make a claim with FEG. To qualify for FEG assistance you must meet the following criteria 

  • You were an employee;

  • You fulfil FEG’s eligibility criteria;

  • You lost your job because your employer is in liquidation; and 

  • You are owed unpaid entitlements by your former employer.

If your situation does not meet all the above criteria, you will have to explore whether there are other avenues available to you recover any unpaid entitlements owed to you. You can start by looking at our section below on “What do I do if I’m not entitled to apply for FEG assistance?”.  

Am I an employee? 

You must be an employee to seek assistance from FEG. You will likely be considered an employee if 

  • You were engaged by the company under an award, enterprise agreement, agreement-based transitional agreementor a contract of employment; and 

  • You were paid a salary, wage and/or commission. 

If you are a contractor, you will not be eligible for assistance from FEG.  

To find out what the difference is between a contractor and an employee, you can have a look at information published by the Australian Tax Office.

If you are unsure whether you were a contractor or an employee, you can ask us directly on Justice Connect Answers.

If you are sure you were an employee, but your paperwork says that you were a contractor, you should get legal advice about what you should do nextYou can apply for assistance from our Federal Self Representation Service.

Exception for textile, clothing, and footwear contract outworkers 

Contract outworkers in the textile, clothing and footwear industry may be eligible for assistance through a special assistance scheme under FEG.

If this applies to you, you should read the information published by the Department of Employment and Workplace Relations.

Am I eligible to apply? 

You are eligible to seek assistance from FEG if you fulfil all the following descriptions at the time you lost your job 

  • Your employer entered liquidation or bankruptcy on or after 5 December 2012;

  • You lost your job due to the liquidation or bankruptcy of your employer or were terminated after, or within 6 months before the appointment of a liquidator or bankruptcy trustee for your employer;

  • You are owed employment entitlements;

  • You have taken steps to prove the debts in the winding up or bankruptcy of the employer;

  • If you were owed debts before the appointment of a liquidator or bankruptcy trustee, you took steps to be paid the debts before; and

  • You were an Australian citizen, or holder of a permanent visa that gives you the right to work in Australia.

You are ineligible for FEG assistance if you fall into any of the following excluded classes of employees:

  • You were a director of the company that employed you 12 months before the appointment of a liquidator for your employer;

  • You were related to the director of the company that employed you in the 12 months before the company entered liquidation;

  • You converted from contractor to employee with the same employer within 6 months before the appointment of a liquidator for your employer; or

  • Your employer was within the scope of the scheme known as the Special Entitlements Scheme for Ansett Group Employees.

How to apply for FEG assistance 

You must make an application for FEG assistance within 12 months of:

  1. either a liquidator being appointed to your employer; or

  2. the date you lost your job.  

You can make a claim online at FEG Online services.

If you cannot make a claim online, you can print and complete the FEG Claim Form and email or post it to the Australian Government Department of Employment and Workplace Relations.

For more information about how to apply for FEG assistance, please have a look at the information published on the Australian Government Department of Employment and Workplace Relations website.

What if I’m not eligible to apply?

You may not be entitled to apply for FEG assistance if:  

  • You are an excluded class of employee (see excluded classes of employees under heading ‘Am I eligible to apply?’);

  • You are not an Australian citizen or permanent resident;

  • You are a contractor;

  • Your employer has stopped trading, but is not liquidated; or

  • The debts you say are owed to you are not covered by the entitlements that FEG covers.

In these situations, you will have to consider your next steps carefully. The following information will take you through the options you have. Please note that some of these options are complex, and we recommend that you seek legal advice before taking any action.  

Recovering unpaid entitlements from your employer’s insurance 

As an employee, you may be entitled to recover unpaid entitlements from your employer’s insurance company if they have deregistered.

To find out whether you have such an entitlement, you can consider:  

  • Reviewing any correspondence your employer sent to notify you of your termination as a result of their closure; or 

  • Contacting your employer’s liquidator.

Reinstating your employer’s company   

If you are unable to recover unpaid entitlements through FEG or from your employer’s insurer, you will have to consider whether you need to reinstate your employer’s company so that you can commence legal proceedings against it.  

Should I try to reinstate my employer’s company?  

You should consider whether it is worth your efforts to reinstate your employer’s company before you take any steps.  

The effect of reinstatement is:  

  • Your employer will once again exist as a legal entity. This means you can list them as a party in court proceedings; and

  • Any of the company’s assets, which vests in the Commonwealth or ASIC when it is deregistered, will be re-vested in the company.

In the context of a company that has stopped trading due to liquidation, it may not be worth your time and efforts to have them be reinstated. This is because they may not have assets available to pay you, even if you are ultimately successful in obtaining an order that they pay you your entitlements.   

We strongly recommend that you seek legal advice if you wish to consider whether you wish to reinstate your employer’s company. You can apply for assistance from our Federal Self Representation Service.

How do I reinstate my employer’s company? 

There are two ways you can follow to reinstate your employer’s company.   

Option 1 – Apply to ASIC

As an employee, you can only apply to the Australian Securities and Investments Commission (ASIC) to reinstate your employer’s company status if you had already started legal proceedings against them before they were deregistered.  

ASIC has published information on how you could apply to them for reinstatement of a company, under the subheading “How to apply for reinstatement as a third party”

Option 2 – Obtain a court order

If you have not commenced legal proceedings against your employer before they were deregistered, your only option to reinstate a company is to obtain a court order that ASIC reinstate the registration of the company.  

This is a complex process that will take time, money and effort. Depending on the facts of your specific case, reinstatement of your employer’s company may not be worth your time or money. 

Wstrongly recommend you seek legal advice before taking this action. You can apply for assistance from our Federal Self Representation Service. 

What happens after my employer’s company is reinstated? 

If you are successful in reinstating your employer’s company, you will still have to make a claim against the company as you normally would.

 

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  This resource was last updated on 18 June 2024. This is legal information only and does not constitute legal advice. You should always contact a lawyer for advice specific to your situation. Please view our disclaimer for more information.

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