Updated 3 September 2020
COVID-19 has impacted employees and their businesses across Australia. Some businesses have struggled to stay afloat, and this can affect their ability to pay their employees what they are owed. As a result of cashflow issues, some business may be forced to close down and liquidate in order to settle their debts. As an employee, there are steps you can take to make sure you get the payments you are owed.
This resource is for employees who are owed payments from their employer and believe that the employer is about to close down. It includes information about:
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
I have reason to believe my employer is about to close down
I am owed payment from my employer
If you think your employer is about to close down, the first thing you need to do is check whether they are still registered as a company.
It’s important to check whether your employer is registered because the legal avenues 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 as a result of cashflow problems, they will likely have to liquidate their assets in order 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 confirmed that 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:
Your next steps will be different depending on what the status of the company is.
This means that the company still exists. However, the company may already have taken steps to deregister, so you should do some further 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 isn’t 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 haven’t been any delays in website updates.
You can call ASIC’s Customer Contact Centre on 1300 300 630. It is open Monday to Friday 8:50 am to 5:00 pm.
Step 3: Set up a Company Alert on ASIC
Even if you have followed all the steps above and confirmed that the company is still registered, you may still be concerned that your employer will deregister as a company in the near future.
To make sure you are notified of any changes to the company’s registration as soon as possible, you can set up a Company Alert on the ASIC website. Instructions for doing this is 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 an employer for payment when they are deregistered”.
This means that the company still exists, but is in the process of voluntary deregistration or being deregistered by ASIC.
In either case, you can apply to ASIC to stop the process in certain circumstances. These circumstances are if you:
You should seek legal advice if you don’t know whether you have a claim against your employer, or if you need help commencing proceedings against your employer. You can also find more information on bringing legal claims against your employer for unpaid entitlements.
You can apply to ASIC to stop the deregistration process by filling in an online enquiry form.
In your enquiry you should include:
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 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, please have a look at the information on the Australian Government Attorney General’s Department website.
Temporary supports are available to help people affected by COVID 19, including:
These resources contain information about steps you could could take if you lose your income because of COVID-19:
You can find more helpful resources to help you understand your rights and solve legal problems by following the links below: