New laws will protect workers and their entitlements

Joint Media Release
  • Minister for Jobs and Industrial Relations
  • Minister for Women
  • Assistant Treasurer

The Coalition Government is putting Australian workers and taxpayers first with new laws passing the Parliament to ensure employers don’t avoid their workers’ entitlements. 

Minister for Jobs and Industrial Relations, the Hon Kelly O’Dwyer MP, said the new laws will address corporate misuse of the taxpayer-funded Fair Entitlements Guarantee (FEG) scheme. 

“Employers must pay the entitlements their workers are due. Those employers that do the wrong thing will face the full force of the law,” Minister O’Dwyer said. 

“These vital new laws crack down on companies which try to evade their obligations to their workers, including through illegal phoenix activities, and shift the burden to the taxpayer.”

"Misuse of the Fair Entitlements Guarantee scheme by employers places an unfair burden on Australian taxpayers.”

"It also creates an unfair commercial advantage over honest competitor businesses who do the right thing by their employees." 

The FEG is an important safety net for Australian workers which protects employment entitlements when workers lose their job due to their employer’s insolvency. 

Whilst the overwhelming majority of companies are doing the right thing, unfortunately, some employers shift employee costs onto the FEG scheme for their own advantage, or just to exploit the scheme. This improper use of FEG contributes to increased costs and is an unfair burden on taxpayers. 

Assistant Treasurer, the Hon Stuart Robert MP, said the new laws are tightly targeted to deter and punish only those who seek to avoid their employee entitlement obligations and exploit the FEG scheme. 

"The new laws mean we have stronger levers to ensure employers are held accountable for their obligations. Stronger penalties, better options to recover entitlements and greater powers to deal with directors and companies deliberately evading their obligations," the Assistant Treasurer said. 

The new laws amend the Corporations Act 2001 to: 

  • deter and penalise directors and others who engage in, or facilitate, transactions directed at preventing, avoiding or reducing employer liability for employee entitlements in insolvency; 
  • recover employee entitlements from related entities if that entity benefitted from work performed, even if it did not employ the employees directly; and
  • strengthen sanctions for directors and company officers with a track record of corporate contraventions and insolvencies where FEG is repeatedly and inappropriately relied on.

These reforms build on the unprecedented actions taken by the Coalition Government to protect vulnerable workers and their entitlements, including action to protect vulnerable workers by introducing tough new laws; increasing penalties tenfold; and providing additional funding and strengthening the investigative powers of the Fair Work Ombudsman.

The Government has also provided $20.9 million to the Australian Taxation Office (ATO) to establish the Superannuation Guarantee Taskforce and introduced new laws which for the first time enables the ATO to seek criminal penalties for employers who refuse to pay workers superannuation.

It has taken the Coalition Government to deliver real protections for Australian workers and their entitlements. 
 

For more information

Media mailbox: media@employment.gov.au