How does Insolvency impact me?
As an employee of an insolvent company that is in administration, Deed Of Company Arrangement (DOCA), liquidation or receivership you may be an unsecured creditor. The Australian Securities Investment Commission (ASIC) has the most up-to-date information for anyone impacted by an insolvency event and to explain the processes involved.
In addition, as an employee, you are in the unique position of being able to notice and report financial misbehaviour. ASIC relies on people inside companies and organisations (sometimes called whistle-blowers) to advise them of possible misconduct or breaches of the law in order to prevent harm to others in the company and to all consumers.
You should know that there is now some protection for whistle blowers under the 2019 changes to Australian law.
What can we do to help you?
The team at Auxilium Partners has wide experience with insolvency events across all industries. We understand that it is a stressful time for employees and we strive to keep you informed as often as possible.
We must ask you to be patient and encourage you to answer our emails promptly. You will be asked to lodge a claim against the company called Proof of Debt to clarify your situation if some of your entitlements have not been paid.
Auxilium Partners make it a major priority to ensure employee entitlements are paid from the insolvent company’s funds as soon as possible. But investigations, calculation processes and sale of assets can take more time than you expect. Early payment is subject to there being enough money available after cost of liquidation and obeying the laws with regard to secured creditors. The method of paying employee entitlements is: Wages and superannuation are equal first priority; Annual and long service leave are paid second and lastly, Redundancy and payments in lieu of notice are made.
If there is not enough money for the company to pay all your entitlements then you may be eligible to receive assistance from the Australian Government Fair Entitlements Guarantee (FEG) scheme set up in 2012. Please read the criteria for this financial help on the FEG website. FEG does not cover outstanding superannuation contributions so you will need to consult the Australian Taxation Office.
The FEG application cannot be started until almost the end of the insolvency process. Auxilium Partners can help you to determine your eligibility and the best time to apply for FEG assistance. Contact Us when you are in this situation.
When Auxilium Partners is the liquidator, we can provide a PAYG Payment Summary for your tax return if you did not receive it from your employer. Also note, if your employer did not correctly remit your PAYG tax to the Australian Taxation Office (ATO) you will not be penalised.
When Auxilium Partners is managing the insolvency event at your workplace, please Contact Us if you have questions after reading the information and links on this page.