Kieran Salsone

Companies going bust could hit workers even harder

WORKERS left without a job when their employers go broke could soon lose some of their government payouts, after the Abbott Government moved to cap entitlement guarantees in Parliament.

The Fair Entitlements Guarantee Amendment Bill, introduced in the House on Thursday, would put in place one of the government's smaller budget measures in a bid to save about $80 million for taxpayers.

Currently, the entitlements for workers include up to 13 weeks of unpaid wages and leave, in addition to five weeks payment "in lieu of notice" and up to four weeks pay per full year of service.

But the government plans to cap the total unpaid entitlements for workers who lose their job due to liquidations or bankruptcy of their employer to only 16 weeks of pay.

Explanatory notes for the bill show it implements the government's May budget announcement to "align" maximum redundancy payouts to the National Employment Standards, rather than the specific guarantee made in the original act.

The move would save the Abbott Government some $9.2 million in the 2014-15 year, growing to $20.8 million in 2015-16, $23.3 million in 2016-17 and $26.1 million in 2017-18, or just shy of $80 million over the forward estimates.

It would also make several "technical amendments" to the act, including removing the need for employees who were owed debts prior to their employer going bankrupt to take "reasonable steps to be paid those debts".

Instead, the proposed amendments would give the secretary of the Department of Employment the power to reduce the employee's entitlement by the same amount of debts on the assumption "that he or she did not take reasonable steps to be paid".

The government's bill comes as Palmer United Party leader Clive Palmer moves to set up an inquiry into taxpayer-funded bailouts of struggling companies.

While focused on the creation of an "Australia Fund" to help pay for natural disaster recovery, the new inquiry could also investigate the potential for government loans for rural and manufacturing businesses, as well as insolvency laws.

That inquiry, yet to be formally confirmed by the parliament, is expected to be put forward during the next sittings in October.

The government's bill on entitlement guarantees is also expected to be debated during the next sittings, and if passed, it would take effect from the start of next year.


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