ASIC has assisted employees gain access to the Fair Entitlements Guarantee scheme (FEG) by exercising its wind-up powers and appointing liquidators to 17 abandoned companies in the 12-month period ending 30 September 2018.

Because ASIC appointed the liquidators, employees of these 17 companies can now apply to recover owed unpaid employee entitlements. The 17 abandoned companies owe at least 32 employees more than $570,000 in employee entitlements.

The appointment of liquidators also facilitates a full and proper investigation into the reasons why the companies failed and allows recovery of any voidable or unreasonable director-related transactions that can potentially be returned to creditors.

ASIC made the following nine appointments from a new panel of liquidators who can be appointed to abandoned companies.

Prior to February 2018, ASIC made eight appointments under the previous (now expired) panel as follows:

Background

The FEG is a legislative safety net funded by the Australian Government. It is designed to assist employees recover owed unpaid employee entitlements because of their employer company’s liquidation or bankruptcy. In addition, the Department of Jobs and Small Business operates the 'FEG Recovery Programme'; a programme designed to strengthen recovery activity of amounts advanced under the FEG. More information about it is available here.

Some employees owed entitlements cannot access FEG because the companies’ directors are either unable to discharge their duties or abandoned their insolvent companies without putting them into liquidation. ASIC’s appointment of liquidators facilitates access to FEG for these employees. ASIC first used its powers in 2013 (refer: 13-233MR) and to date has wound up 110 companies.