Process for Claiming Employee Entitlements in Liquidation: A Detailed Guide

When a company goes into liquidation in Australia, employees are entitled to certain payments and entitlements under the Fair Entitlements Guarantee (FEG) scheme and other provisions of the law. Understanding the process for claiming Employee Entitlements Liquidation these entitlements is crucial for employees affected by the liquidation.

At the Liquidation Advisory Centre, we can guide you through the process and give you all the information you need regarding employee entitlements during the liquidation process. We have over 30 years of insolvency and liquidation experience, so you will be in safe hands with us. Here’s a step-by-step guide to the process:

Notification of Liquidation

• Notice from Liquidator: The appointed liquidator must notify employees of the company’s liquidation. This notice may be provided in writing or through a staff meeting with the appointed liquidator.
• Information about Entitlements: The liquidator must inform employees about their entitlements under the FEG scheme and other applicable laws within the required timetable and framework set out by Fair Work Entitlements.

Lodging a Proof of Debt

• Complete Claim Form: Employees must complete a Proof of Debt form provided by the liquidator. This form requires employee employment details, including salary, entitlements, and any outstanding payments.
• Supporting Documentation: Employees should gather supporting documentation, such as payslips, employment contracts, and records of leave entitlements, to substantiate their claims.
• Submit Claim to Liquidator: The completed Proof of Debt form and supporting documentation should be submitted to the liquidator within the timeframe set out by the Fair Work Entitlements scheme.

Assessment of Claims

• Review by Liquidator: The liquidator will review the employee’s claim and assess its validity based on the supporting documentation provided.
• Verification of Information: The liquidator may request additional information or clarification from the employee to verify the accuracy of the claim.

Payment of Entitlements

• Priority Payments: Employee entitlements are prioritised in the distribution of assets during the liquidation process. Certain entitlements, such as unpaid wages, superannuation contributions, and redundancy payments, are given priority over other secured and unsecured creditors.
• FEG Scheme: If the company cannot meet its obligations to employees, eligible employees may be able to claim their entitlements under the FEG scheme administered by the Australian Government.

Communication with Liquidator

• Keep Informed: Employees should communicate openly with the liquidator and promptly provide any requested information or documentation.
• Seek Clarification: If employees have questions or concerns about their entitlements or the claims process, they should seek clarification from the liquidator or legal advice.

Review and Appeal

• Review Decision: If an employee’s claim is rejected or disputed by the liquidator, they may have the right to request a review of the decision.
• Appeal to Court: In certain circumstances, employees may have the option to appeal the liquidator’s decision to a court or tribunal for further consideration.

Process for Claiming Employee Entitlements Liquidation

Claiming employee entitlements in liquidation can be complex, but employees have legal rights and protections to ensure they receive the payments they are owed.

At the Liquidation Advisory Centre, we can help company directors, stakeholders, and employees fully understand the abovementioned process. We help to ensure that by engaging with the liquidator in a timely and cooperative manner, employees can navigate the claims process effectively and maximise their chances of receiving their entitlements.

If disputes arise, we can act as mediators and assist in seeking legal advice that may also benefit employees facing challenges or conflicts during the claims process, ensuring their rights are protected and upheld.