The Australian Government has successfully appealed a Supreme Court of Victoria decision that denied employees of an insolvent corporate trustee priority payment of their unpaid entitlements.
Minister for Small and Family Business, the Workplace and Deregulation, Craig Laundy, said this important win was secured through the Fair Entitlements Guarantee (FEG) Recovery Program.
"The original decision in 2017, Re Amerind Pty Ltd, meant that the priority given to employee’s unpaid entitlements under the Corporations Act would not be available if their employer was a corporate trustee of a trading trust," Minister Laundy said.
"It also diminished the Commonwealth’s right to recover employee entitlements advanced under the FEG scheme.
"That is why we appealed the decision, and the Victorian Court of Appeal found unanimously that the priority regime under the Corporations Act does apply to the winding up of a corporate trustee.
"This means that employees will now be able to claim priority repayment even where a company is a corporate trustee.
"Our action has resulted in a positive outcome for both employees and for taxpayers because the Court’s decision means the Government is likely to recover some of the $3.8 million advanced to former employees in this case, and it will set a precedent for the future.
"Under the FEG Recovery Program the Government had funded more than 100 matters and recovered more than $60 million to date and at the same time delivered more than $2 million in other unpaid entitlements to Australian workers including for their superannuation.
"At the same time the Government is implementing reforms to the Corporations law to prevent corporate abuse of the Fair Entitlements Guarantee scheme, which will stop employers from exploiting this taxpayer-funded scheme and avoiding their responsibilities to their employees.
"Our Government will keep up the pressure on employers to meet their obligations to employees and our FEG scheme is already delivering strong results."
For more information go to: www.jobs.gov.au/feg-recovery-program