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Help! My employer shut down their business quite suddenly - going into voluntary deregistration. They still owe me wages for the last few weeks, not to mention annual leave and long service leave.
These employers have actually shut down and started up again in the past.
I contacted ASIC, trying to find out how I could get my entitlements, but I haven’t heard anything back.
Are they really going to get away like this? How is this possible?
The good news is that your employer still exists. The bad news is that your employer is a slimy underhanded so-and-so, and you’re going to be put through a fight just to get wages you’ve already worked for.
It sounds like your employer has gone through what is called “voluntary deregistration”. This is definitely the method of choice for employers, as opposed to bankruptcy, receivership or liquidation. When it works as intended, it’s meant as a way for a company to wind up its operations and close its doors once all financial matters are settled.
One of the conditions for applying for deregistration through ASIC (the Australian Securities and Investments Commission) is that there are no outstanding liabilities, like workers’ wages. But since the company makes a self-declaration, it is certainly possible to lie about it.
The thing bosses love about deregistration is that there’s nothing stopping them from just registering a new company immediately and starting up again. Dodgy operators love doing this, as it lets them wipe the slate clean and then start all over again with their underhanded ways.
Like the mythical phoenix, the company burns up and then is reborn anew from the ashes.
It’s embarrassing for ASIC that they haven’t acted on your inquiry - some industrial muscle in the form of a letter from your union will probably fix that. If you can make a declaration to prove that you are, in fact, owed wages and entitlements, they are able to reverse the deregistration and instead place the company into liquidation.
The difference between a deregistration and a liquidation is that when it comes time to sell the company’s assets, the money must first go to anyone that is owed money by the company. This way, business owners don’t get to keep the value of the company’s assets for themselves while workers are out of pocket.
Once the company is in liquidation, you will be able to make a claim through the Fair Entitlements Guarantee Scheme (FEGS) to have (almost) everything you are owed paid back to you. Unfortunately, FEG only covers the last 13 weeks of employment and you cannot get your unpaid superannuation through it. Absurdly, you are also unable to access FEGS if you are a visa worker.
Your union industrial officer will be able to guide you through the process of convincing ASIC to liquidate instead of deregister the company, and getting the pay that’s owed to you. It is not fair that you should have to go through this lengthy process at all, but with the support of your union, you’re going to be the winner, eventually.
Principal Solicitor, Young Workers Centre
Help! My employer shut down their business quite suddenly - going into voluntary deregistration. They still owe me wages for the last few weeks, not to mention annual leave and long service leave. These employers have actually shut down and started up again in the past. I contacted ASIC, trying to find out how I could get my entitlements, but I haven’t heard anything back.