As more and more Australians are living paycheck to paycheck, job insecurity can be a big weight on employees’ shoulders.
When you leave a job, you’re typically paid any outstanding wages owed to you, along with leave entitlements if you’re a permanent employee (rather than a casual worker). But what happens if you lose your job due to your employer’s business going under?
After all, you’re still owed your wages for time worked, and your leave balance needs to be paid out. However, if a business simply doesn’t have the finances available to pay, do you have any recourse?
This is a question that, sadly, over 300 employees of Rex Airlines were recently forced to ask after being stood down due to the company entering administration.
Thankfully, you absolutely do, however in practice it can be a lengthy process between a business going into administration or being declared insolvent and entering liquidation and you receiving your owed entitlements.
Administrators for Rex Airlines reportedly told their affected employees that it could be months before they were able to pay any wages due to insufficient funds being available.
AFTRS FM’s own Ben Lewis sat down with Professor Michael Adams, Academic Dean of the School of Law at the University of New England, and expert in corporate law, to discuss what rights employees have when a businesses ceases to operate and what they can do if they have been affected by administration or liquidation.
Thankfully, while it can take some time to go through the proper process, employees do become creditors and are owed a debt by an insolvent business which needs to be paid off. Even if a business doesn’t have the funds after being wound up to pay all their debtors in full, employees can access the Fair Entitlements Guarantee Scheme to recoup their losses.
You can hear Professor Adams’ full thoughts on the matter by listening into AFTRS FM through iHeartRadio on Tuesday, September 3 at 3:00pm.
Feature photo by Miles Burke: https://www.pexels.com/photo/money-and-cards-7654007/
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