Company in Voluntary Admin
what happen with husbands entitlements?
, Apr 30 2012 06:18 PM
6 replies to this topic
Posted 30 April 2012 - 06:18 PM
Just wondering if someone can give me an overview.
The company that my husband works for has gone into Voluntary Administration, apparently there is a letter in the mail telling DH what is going on but it is coming from the other side of the country so not expecting it until next week.
They said that pay is 1 week paid, 1 week in advance and so pay is all paid to the end of the month ie today. What we are wondering about is what happens to his leave pay, superannuation, and will he be paid a redundancy or not. He has also been there for just over 7 years so is he entitled to any long service?
We are also wondering how long until they let him know that his is no longer employed because if he isn't going to get any more pay he needs to get another job asap so we can pay the mortagage etc.
Thanks for any help. I tried to look on ASIC but didnt really understand it.
Posted 30 April 2012 - 06:29 PM
Having just been through this myself, I hope this helps
All of his entitlements (incl. LSL which will be pro-ratad) have been frozen as they are liabilities of the company pre-administration.
Going forward the administrators are liable and have to guarantee any money owed incurred by them, so wages, leave accrued, and any creditors invoices.
Re ongoing employment - have they advised what the goal of the administration is (ours was due to a tax office court case and garnish of income)? Are they hoping to trade out, or liquidate, or sell?
Technically, they do not have to pay out any outstanding entitlements until they liquidate the company, at which time you husband will be placed on the list of creditors after secured debts but before regular suppliers - if there is no money to pay out he can apply through GEERS to get his money. ETA they can CHOOSE to pay this out if they make staff redundant during the administration period (our company have said they will, but I finished work in Feb and am still waiting) but don't HAVE to pay more than any unpaid wages.
Have a look at the Fair work website, or give them a call, there is heaps of info there.
Edited by blue86, 30 April 2012 - 06:30 PM.
Posted 30 April 2012 - 06:47 PM
Try this website for some info
- get your husband to call his super company and make sure his super has been paid - this is a major thing that they tend not to pay if they are in money troubles - some companies are ok, but some can be less than scrupulous.
I would ask for a copy of this letter to be emailed to you, especially if it will be delayed by postal due to location.
Edited by Willow Angel, 30 April 2012 - 06:49 PM.
Posted 30 April 2012 - 07:04 PM
The company I work for went into liquidation last year.
To explain the processes, voluntary administration is put in place by the directors. An administrator is appointed and the company will be investigated. The administrator will determine if the company should continue trading and be returned to the directors, or if it should be put into liquidation.
If the company is put into liquidation (liquidation is basically the winding up and selling off all assets of the company) your husband will most likely be terminated. If he is in NSW, he should be eligible for the following (based on 7 years service):*4 weeks notice period or payment in lieu of notice (I think it is 5 if he is over 45?)*minimum 6 weeks redundancy pay under National Employment Standards) although if he is employed und an award this could be about 11 weeks*about six weeks long service leave*all unused annual leaveUsed sick leave and that sort of entitlements are generally not paid out.
So he should get a minimum of 16 weeks pay plus any unused annual leave. Redundnacy pay is not taxed and all other pay is taxed at a maximum of 31.5% (I think). So redundancy, as long as you find another job within a few months can be a good thing financially.
Now actually getting this money.....if the company has the money, it will be payed to him when he is terminated. If the company has no money, he will need to apply to GEERs which is a government scheme that covers employee entitlements. This scheme will pay out these entitlements, although the process can take longer than 18 weeks. My company was put into liquidation in December last year and I am still waiting.
Bear in mind, you can't apply to GEERs until the company is in liquidation.
But if they are in voluntary administration, the company may contiue and he may keep his job.
Posted 30 April 2012 - 07:36 PM
From what we can gather the Directors are trying to convince the admin that the company is ok and they can keep going (though if that was the case they wouldnt be where they are now).
We were under the impression that the banks always get their money first followed by the employees and then the creditors. (to put it simply)
Then he thought that because of the admin that they didnt have any obligation to pay out redundancies.
Thanks Willow angel - great suggestion re email. hadn't thought about it.
Thanks for your replies.
Posted 02 May 2012 - 12:42 PM
One of the companies I work for has just gone into voluntary administration so I do feel your pain.
When my husband's company went into liquidation 2 years ago, the GEERS scheme paid all of his unpaid annual leave, redundancy entitlement and long service leave BUT it did not cover any superannuation (at that time anyway) and the company had not paid his super for 6 months and we hadn't bothered checking), so he missed out on this.
I think blue86 answered your queries really well, but yes, usually there is a hierarchy of people who get paid. The administrators pay employees and themselves before paying any unsecured creditors.
Posted 02 May 2012 - 12:52 PM
PP have explained everything really well. However his superannuation & PAYGW should be paid as normal.
Creditor priority is actually the employees, ATO & the administrators as number 1, then the secured creditors & then any unsecured creditors.
There had been proposed changes to the legislation which will make directors personally liable for the payment of employees superannuation & PAYGW - but at this point in time i can't find if they went through.
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