On 5 October 2017, the Australian Government announced it would introduce new laws to address corporate misuse of the Fair Entitlements Guarantee (FEG) Scheme.
The proposed laws will provide a significant disincentive for employers that exploit the taxpayer-funded scheme and avoid their responsibilities to their employees.
The exposure draft includes amendments to:
- strengthen civil recovery action, plus criminal and civil penalties available against company directors and other persons, who engage in transactions that are directed at preventing, avoiding or reducing employer liability for employee entitlements;
- ensure recovery of outstanding employee entitlements of an insolvent corporate group member, where it would be just and equitable and where other entities in the group have benefited from the work done by the insolvent entity’s employees; and
- strengthen the ability to sanction directors and company officers with a track record of insolvencies where FEG is repeatedly relied upon.
The proposed laws follow extensive public consultation undertaken in 2017.