Can I pursue an employer for unpaid wages if they are no longer trading?
Last updated 10 September 2024
Last updated 10 September 2024
As a result of cashflow issues, some business may be forced to close and liquidate to settle their debts. As an employee, there are steps you can take to make sure you get the unpaid wages you are owed.
This resource is for employees who are owed payments from their employer and believe that the employer is about to close or has already closed. It includes information about:
How to confirm the company status of your employer
What to do next depending on the company status of your employer
This resource is written for you if all of the following questions apply:
I am an employee
My employer is a company
I have reason to believe my employer is about to close or my employer has closed down
I am owed payment from my employer
If you think your employer is about to close or has closed, the first thing you need to do is check whether they are still registered as a company.
It is important to check whether your employer is registered as a company because the pathways for pursuing an employer for outstanding payments changes depending on whether they are still registered as a company with the Australian Securities and Investment Commission (ASIC).
This is because when a company stops operating because of cashflow problems, they will have to liquidate their assets to settle any outstanding debts. If they are unable to settle their debts even after liquidation, they will either choose to deregister with ASIC voluntarily or ASIC will take steps to deregister them.
The quickest way to search for the status of a company is by searching on the ASIC database. You can search by inputting your employer’s entity name, Australian Business Number (ABN), or Australian Company Number (ACN).
Once you have found the right ASIC record, you should look at the status of the company under “Company Summary”. It will list one of the following options:
Registered
Deregistered
SOFF (Strike off status)
External Administration (or words relating to administration or administrators)
In liquidation (or words relating to liquidation)
Your next steps will be different depending on what the status of the company is.
This implies that the company is still operational. However, the company may already have taken steps to deregister, so you should do additional research by following the steps below.
Step 1: Search ASIC Published Notices
Even if your employer is listed as registered, they may still be in the process of voluntary deregistration.
You can check whether a company is in the process of deregistration by looking at the ASIC Published Notices. Companies are listed on the ASIC Published Notices two months before they are deregistered.
You will know if the company is in the process of deregistration if it has submitted a Winding Up application. If this applies to you, you should read the information on what to do if your employer is in the process of deregistration below.
Step 2: Call ASIC
If your employer is not listed as deregistered or in the process of being deregistered on either the ASIC Register or the Published Notices, you can ring ASIC to confirm there have not been any delays in website updates.
You can call ASIC’s Customer Contact Centre on 1300 300 630. It is open Monday to Friday from 8:50 am to 5:00 pm.
Step 3: Set up a Company Alert on ASIC
If your employer is still registered but you are concerned that your employer will deregister as a company in the future, you can set up a Company Alert on the ASIC website. This will notify you of any changes to the company’s registration.
Instructions for doing this are on ASIC’s website.
This means that the company no longer exists.
To find out what avenues are available to you to pursue unpaid wages, you should read our resource on “Pursuing unpaid wages when my employer is deregistered”.
This means that the company still exists but is in the process of voluntary deregistration or ASIC has initiated its deregistration.
In either case, you can apply to ASIC to stop the process in certain circumstances. These circumstances are if:
You are conducting legal proceedings against your employer; or
You intend to commence legal proceedings against your employer shortly.
You should seek legal advice if you do not know whether you have a claim against your employer, or if you need help commencing proceedings against your employer. For further details on pursuing legal claims against your employer for unpaid entitlements, you can click here for more information.
You can apply to ASIC to stop the deregistration process by filling in an online enquiry form.
In your enquiry you should include:
The company’s name and Australian Company Number (ACN).
The reason you want to defer the deregistration of your employer.
Brief details of the legal action you have brought / are about to bring against them.
Any documents you have supporting your claim that your employer owes you money. These documents might include pay slips or any correspondence with your employer discussing the issue.
If ASIC grants your request and stops the deregistration of your employer, they will not stop it indefinitely. Instead, they will delay the process to allow your legal proceedings against your employer to take place. After that they will recommence deregistration.
If the company status refers to “administration”, this means that the company still exists, but is being managed by, or in the process of, being appointed an external administrator.
If you think you are owed money as an employee by a company that is under administration, you may be a creditor. For more information about what employees can do to recover debts from a company under administration, you can look at ASIC’s “Voluntary administration: A guide for employees”.
If you have questions about your entitlement as an employee of a company under administration, ask us on Justice Connect Answers.
If the company status refers to “in liquidation”, this means that the company’s assets are currently being sold off by an administrator to settle their debts. Once liquidation is finished, ASIC will deregister the company.
If you think you are owed money as an employee by a company that is in liquidation, you may be a creditor. For more information about what employees can do to recover debts from a company in liquidation, you can look at ASIC’s “Liquidation: A guide for employees”.
If you confirm that your employer is in liquidation, you may be able to recover unpaid entitlements under the Fair Entitlements Guarantee scheme. For more information about this, read our resource on “Pursuing an employer for unpaid wages when they are deregistered”.
Please note that Justice Connect Answers can only help with quick legal questions and does not qualify as an application for comprehensive legal help. If you need ongoing legal help with your problem, the best thing to do is submit an online application.
You might be eligible for free legal help from our lawyers. Making an online application is the quickest and best way to apply for free legal help.
Takes less than 8 minutes
(4.4 star rating)
This resource was last updated on 10 September 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.