Super - Liquidation of Employer

Hi All,

I am a PAYG (Pay as you go) employee.

Sad situation, my employer is likely to go bust, due to inability to pay it's bills.
I believe that directors have to draw the line in the sand before they *trade whilst insolvent*.

We are now mid way through May 2014, with 1? months to go before financial year end.

For the whole of this financial year, my employer has failed to pay....
a) my 9.25% Super Guarantee (SG), AND
b) my $250 per week salary sacrifice
....to my super fund.

3 Questions....

Q1 - What is the exact order of payment for a liquidated entity ?
I believe that liquidators/administrators get paid before wages owing to employees. Highly detailed ranking would be good.

Q2 - If there is no money (because the liquidators have sold all assets then paid themselves to do this) to pay the SG of 9.25% owed to employee superannuation funds, is there a government scheme that will pay the relevant employee's super fund, out of a pot allocated for this pupose ?

Q3 - Same as question 2, but in relation to Salary Sacrifice, which may or may not rank equal, or lower, then the 9.25% SG, depending upon the answer to Q1.


Not Good. :mad:

Thank You All.
 
I am pretty sure that Government has some form of insurance in place that covers workers for this scenario. A couple of phone calls to your super fund, ATO should be able to confirm this??
 
You should be contacting the ATO to advise them that it has not been paid. They will essentially undertake an audit to confirm the amounts owing. They are usually pretty good at following up unpaid super and the company's directors are likely to be held personally liable even once the company is wound up.
 
As it is a company the Directors would not be personally liable.

I would also find out if the Directors of this company have nominated an administrator yet, if they have then they should also provide you with the information regarding your super etc.
 
As it is a company the Directors would not be personally liable.
.

True but generally to grow a business you need to take on debt to expand and that debt is a lot of the time secured with the directors assets.

Velohead, It's never fun to be involved in liquidation but you will likely come out of it ok as employee's entitlements and secured creditors (the banks) are first in line to be paid (after the ******* liquidators actually but that is another story :D ) depending how bad the situation is you will likely still get most of what you were entitled to. I have been involved in many liquidations over the years and the employee's always seem to come out ok.

Unsecured creditors like suppliers though....very bad.
 
True but generally to grow a business you need to take on debt to expand and that debt is a lot of the time secured with the directors assets.

That is correct and dependent on whether they did give personal guarantees to creditors, of course as far as banks go they are preferred creditors and get first crack at it.

However as mentioned, Directors are not personally liable when it comes to super and also taxes.
 
This may help, there is a contact number, ASIC

http://www.asic.gov.au/asic/pdflib.nsf/LookupByFileName/Liquidation_guide_for_employees.pdf/$file/Liquidation_guide_for_employees.pdf
 
AFAIK Super should have been paid in within 14 days of each quarter concluding, there are penalties (interest) but if facing bankruptcy they may have decided like many to hold onto what cash they can (delay outgoing payments and chase up any income).

How about your annual leave?
 
Thanks for all your replies, still trawling through to fully digest them.

I should mention that the company is listed on ASX.
(Glad I am not a shareholder).
Not sure how that affects any director liability.

I believe that we don't have any bank debt per se, but I believe funds have been advanced, though not sure of the source of these.

Just phoned the ATO are they are not aware of any scheme to pay SG 9.25% to super fund, then reclaim from Employer, or a pot. That was shocking. I thought that is why we pay taxes. :mad:
 
Just phoned the ATO are they are not aware of any scheme to pay SG 9.25% to super fund, then reclaim from Employer, or a pot. That was shocking. I thought that is why we pay taxes. :mad:

Don't take a call centre staff member as the ATO!

See http://www.asic.gov.au/asic/pdflib.nsf/LookupByFileName/Liquidation_guide_for_employees.pdf/$file/Liquidation_guide_for_employees.pdf
The General Employee Entitlements and Redundancy Scheme (GEERS)
 
However as mentioned, Directors are not personally liable when it comes to super and also taxes.

Yes they are. The rules have changed in the past year or so to make directors personally liable for any unpaid Super Guarantee. They are also personally liable, and have been for some time, for unpaid tax.
 
Just going through this now.

Anything unpaid as of when administrators are appointed will form part of unsecured creditors. This includes unpaid salary, sacrificed salary and SGC. When and if the company is liquidated salary and leave entitlements are a priority over other creditors (excluding the liquidation company themselves, damned vultures), but this does not cover SGC I believe.

FEG only comes into play after liquidation commences, which could be a long time away as company may stay in administration for a long time.

If your company is not in administration now, try your hardest to get anything own paid NOW before it is trapped and/or lost.
 
If your company is not in administration now, try your hardest to get anything own paid NOW before it is trapped and/or lost.

This is the most important bit. In the past I even cut deals with company's I had a feeling were going under that owed me money, took 50, 70, 80% whatever. Sometimes they will go for this because they delude themselves into thinking it will be one less bill to pay eventually...

Sometimes I would even call them up pretending to be a solicitor acting on behalf of my business. :D Hey, you have to wear a lot of different hats in business sometimes! :D
 
Thanks for all your replies, still trawling through to fully digest them.

I should mention that the company is listed on ASX.
(Glad I am not a shareholder).
Not sure how that affects any director liability.

What the company name If it is publicly listed I can do some digging for you through their financial report and see where they stand and its creditors
 
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