Employee entitlements

Employee entitlements (being essentially those claims given priority in the winding up) are protected in two basic ways:

• • It is a criminal offence to enter into a transaction, or as an officer of a company to cause it to enter into a transaction, with an intention to, or reckless as to whether it will, avoid or reduce employee entitlements;
• • It is a civil offence to do those things if he or she knows, or a reasonable person in his or her posi-tion would know, that the transaction was likely to avoid or reduce employee entitlements.

Any loss suffered by employees may be recovered from the person concerned by the liquidator, or if conditions are met, by employees, by a trade union or by certain public officials.

The Commonwealth has established the Fair Entitlements Guarantee (FEG) to enable payment of employee entitlements where the company's assets are insufficient. Such payments are treated in the same way as the claims they meet.

See Employee entitlements.