Labor announces protection for staff if employer goes broke

by 26 Jul 2010

The Federal Government has announced it will act to protect employee entitlements should their employee go bankrupt.

On the Labor party blog, Julia Gillard wrote yesterday that Australian employees are “hard workers and they deserve to know their wages, superannuation and other entitlements are safe.”

The Prime Minister went on to announce a package that would mean that workers will receive a guarantee of full redundancy pay up to four weeks for every year of service, an improvement on GEERS, which was capped at 16 weeks.

Gillard wrote: “The global recession showed just how important [protecting employee entitlements] can be. That is why we have moved today to deliver the strongest protection of employee entitlements that Australians have ever had.”

The package was detailed in three parts:

· The Fair Entitlements Guarantee will protect workers’ entitlements including; redundancy pay (up to a maximum of four weeks for each year of service), all annual leave, all long service leave and up to three months of unpaid wages. The Fair Entitlements Guarantee will be enshrined in legislation.

· Securing Super will strengthen compliance measures to ensure employees receive their superannuation entitlements.

· Strengthening Corporate and Taxation Law will give the Australian Securities and Investments Commission (ASIC) increased powers and strengthen penalties to take action against companies that do the wrong thing. Reforms will be introduced that target ‘phoenix’ company arrangements.

ACTU president Ged Kearney said the government package had widened the gap between the two major parties on who was best able to secure jobs and incomes for working Australians.

She said the Fair Entitlements Guarantee would mean that 97 per cent of workers would receive their redundancy entitlements in full in cases where their employer went out of business without having made provisions for entitlements.

“There is nothing worse than for a worker to first lose their job, and then discover that their employer has not made provision for their entitlements to redundancy, superannuation, and leave,” Kearney said.

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