Well a director has a very strict legal definition as Alex said....he/she who is registered on ASIC as a director. A CEO doesn't necessarily have to be a director, but they usually are. A CEO is just a title made up by someone....it has no legal definition or importance. I can call myself President, Prime Minister or Emperor and it makes no difference.
s9 of the corporations act from memory.
Interestingly it also includes 'shadow directors' -- those not formally appointed but still calling the shots..
Yes, s9 of the Corporations Act, thx Terry.
http://www.austlii.edu.au/au/legis/cth/consol_act/ca2001172/s9.html
Still like to re-iterate that I did not find ATO very helpful regarding the scheme.
A long term collegue tells me that they were paid (pre 2004) by quote "SUPER GUARNTEE PAYMENTS FROM ATO" unquote, when the company failed to pay SGC at that time.
But if there is a scheme, then it should have a specific and unique name, and therefore be able to be googled. Or found on the ATO web site.
Anyone know what name this scheme might have ????
http://www.austlii.edu.au/au/legis/cth/consol_act/ca2001172/s9.html
Still like to re-iterate that I did not find ATO very helpful regarding the scheme.
A long term collegue tells me that they were paid (pre 2004) by quote "SUPER GUARNTEE PAYMENTS FROM ATO" unquote, when the company failed to pay SGC at that time.
But if there is a scheme, then it should have a specific and unique name, and therefore be able to be googled. Or found on the ATO web site.
Anyone know what name this scheme might have ????
The ATO do have a process for recovering unpaid Super on your behalf, however once a company enters administration that process ends and it is the responsibility of the liquidator to advise if there are sufficient funds to meet your employer's super guarantee obligation.
https://www.ato.gov.au/Individuals/...tributions-and-salary-sacrifice/Unpaid-super/
Currently the Government have the Fair Entitlements Guarantee to cover those eligible employees that require assistance when an employer enters liquidation or bankruptcy but that assistance doesn't include unpaid Super.
Again it falls back to the liquidator to see if their are sufficient funds to satisfy the obligation.
http://employment.gov.au/fair-entit...ility-application-process-and-online-services
I named 2 schemes above
The cut off date is the 28th of the month after each quarter.
Eg Jan-Mar - pay by 28 Apr.
https://www.ato.gov.au/Business/Employers-super/How-much-to-pay-and-when-to-pay/
I went through exactly the same thing 4 years ago.
There's a scheme called GEERS which covers your outstanding wages and holiday pay only. It's generally applied for via the liquidator, paid to the liquidator who then forwards to you. You'll very likely not be out of pocket for any unpaid wages or annual leave, (although I'm not sure if it is capped). I was owed about $5k in holiday pay and GEERS paid that out for me.
Super is NOT covered by GEERS or any other safety net system as far as I know, but as other have said, employees are very high up the creditors list if not top?
IF there is anything left once the liquidators have bled the place then you may get a portion of your Super but don;t bank on it. We've been liquidated for almost 4 years whilst they chase out sanding payment, all the while paying them selves a fortune from what they were able to recover. No doubt they'll soon decide there's nothing left to chase, bu which time they'll have paid themselves what they did get and they'll be nothing left for the employees Super anyway.
Long story short, check out GEERS for wages & holiday pay and likely kiss goodbye to your Super.
You may have some recourse against the directors for not paying your salary sacrifice in, (or check with GEERS maybe they'll cover that as it's technically a wage deduction?).
Cheers.
There's a scheme called GEERS which covers your outstanding wages and holiday pay only. It's generally applied for via the liquidator, paid to the liquidator who then forwards to you. You'll very likely not be out of pocket for any unpaid wages or annual leave, (although I'm not sure if it is capped). I was owed about $5k in holiday pay and GEERS paid that out for me.
Super is NOT covered by GEERS or any other safety net system as far as I know, but as other have said, employees are very high up the creditors list if not top?
IF there is anything left once the liquidators have bled the place then you may get a portion of your Super but don;t bank on it. We've been liquidated for almost 4 years whilst they chase out sanding payment, all the while paying them selves a fortune from what they were able to recover. No doubt they'll soon decide there's nothing left to chase, bu which time they'll have paid themselves what they did get and they'll be nothing left for the employees Super anyway.
Long story short, check out GEERS for wages & holiday pay and likely kiss goodbye to your Super.
You may have some recourse against the directors for not paying your salary sacrifice in, (or check with GEERS maybe they'll cover that as it's technically a wage deduction?).
Cheers.
Good points, does anyone else who have been through this think the liquidators are totally crook? I mean who actually polices these guys? When a company goes under they send out all their papers outlining what they are going to do etc. They send a schedule of rates detailing what they charge for each person per hour. Some of those rates...
People in there being charged out at 400-$500 an hour... Who actually says hang on, did this person actually do anything? I have been through at least 10 liquidations over the years and never got anything as an unsecured creditor. It's like they fix up the employee's and banks and then take the rest of the cake for themselves.
GEERS covers insolvency events dated before 5 December 2012 and was replaced by FEG, Fair Entitlements Guarantee
http://employment.gov.au/fair-entit...ility-application-process-and-online-services
Thx for all your replies..
..a lot of good information to trawl through, carefully.
My concerns and non concerns at this point are thus......
Non Concern...
a) Annual Leave - I have none to worry about.
b) Wages - I get paid fortnightly, so the maximum exposure there is losing 2 weeks pay - I can live with that. (Also, as stated above, I would likely get paid this if a liquidation does happen).
Concerns...
c) I am concerned that my salary sacrifice "might" not be classed as either "pay" or "superannuation". (Legal definitions are very precise). That then may put the payout ranking lower, and a lower payout ranking has more likelihood of not being paid in a liquidation.
d) I am concerned that if I ask ATO to audit the SGC situation, then the company cops a large fine (maybe $300,000) , which pushes my SGC lower down the payout ranking. I presume the ATO are higher on the list then Employees. (Unless the fine is not really a fine, but a claw-back for the employees ???)
e) Last concern is that I know that one director lives oversees, in a country that dis-allows overseas assets. Thus he has no Australian assets. Seems he will be ok.
Also, I presume that astute directors would have all assets in their wife's names (maybe too obvious, perhaps in a SMSF/Family Trust pseudo structure of some sort). Thus circumventing the personally liable aspect.
..a lot of good information to trawl through, carefully.
My concerns and non concerns at this point are thus......
Non Concern...
a) Annual Leave - I have none to worry about.
b) Wages - I get paid fortnightly, so the maximum exposure there is losing 2 weeks pay - I can live with that. (Also, as stated above, I would likely get paid this if a liquidation does happen).
Concerns...
c) I am concerned that my salary sacrifice "might" not be classed as either "pay" or "superannuation". (Legal definitions are very precise). That then may put the payout ranking lower, and a lower payout ranking has more likelihood of not being paid in a liquidation.
d) I am concerned that if I ask ATO to audit the SGC situation, then the company cops a large fine (maybe $300,000) , which pushes my SGC lower down the payout ranking. I presume the ATO are higher on the list then Employees. (Unless the fine is not really a fine, but a claw-back for the employees ???)
e) Last concern is that I know that one director lives oversees, in a country that dis-allows overseas assets. Thus he has no Australian assets. Seems he will be ok.
Also, I presume that astute directors would have all assets in their wife's names (maybe too obvious, perhaps in a SMSF/Family Trust pseudo structure of some sort). Thus circumventing the personally liable aspect.
You should definitely stop the salary sacrifice and tell your payroll people that unless they pay the salary sacrifice already withheld today by the close of business that it needs to be reversed and paid to you as salary.
If they are not paying super then the likelihood is the company also owes money to the ATO or is on a payment arrangement with them and likely to be behind with creditors. All it's going to take is one employee (probably an ex-employee) to contact the ATO and everything is in play.
In effect if you keep the salary sacrifice going you're probably accepting (counting the unpaid compulsory super) a 20% salary cut for a job with an uncertain future.
If they are not paying super then the likelihood is the company also owes money to the ATO or is on a payment arrangement with them and likely to be behind with creditors. All it's going to take is one employee (probably an ex-employee) to contact the ATO and everything is in play.
In effect if you keep the salary sacrifice going you're probably accepting (counting the unpaid compulsory super) a 20% salary cut for a job with an uncertain future.
I managed to get my employer to do a negative salary sacrifice, so they paid me an extra $1000 and reduced my YTD salary sacrifice accordingly.
Did not want to do too much, just to keep it low profile and under the radar, and have proof that it can be done technically. I will increase next pay cycle, not sure how much though.
In your employer's situation a squeaky wheel gets the attention. The people/creditors who chase their money are the most likely to get paid.
What you're hoping for is that your employer will last a certain number of pay runs and what you're getting back in your salary sacrifice is partly eroded by your employer's failure to pay compulsory super.
It seems to me that your company's directors have long passed the line where they are trading whilst insolvent. Don't assume that if the decision is made to put the company into administration that there will be any grace period while the company keeps trading. The administrators will only keep trading if they are satisfied there is enough money coming in to cover the wages and costs of the business operating during that time. If they're on the way out you need to have your exit strategy in place too.
Also very few companies that go into administration come out the other side. Only about 20-25% of companies emerge from voluntary administration according to ASIC figures from the 1990s.
Some years ago a group I was working with looked at the voluntary admin path. In that sector the directors were only able to identify one company that had gone into voluntary administration and emerged where stakeholders made a substantial refinancing of the operation. Ultimately the group I was involved in decided to keep trading and with the support of its bank worked through it. But those decisions were based on extremely detailed cash flows and where there was a great deal of certainty about income coming in and because the bank was satisfied that the issues that had arisen that caused the shortage of cash in the operations had been dealt with 12 months earlier and that the operation was financially sustainable. In that sector there were more than 50 boards with similar issues at the same time. A number closed, some were taken over. Although there are no figures publicly available the scuttlebutt in the sector is that our entity has done best out of those 50 odd groups. But it involved a reinvention of the business model and the culture of the organisation, from that which had got the entity into financial difficulty. Unless your company is changing its business model, probably radically, it is unlikely to survive administration. The exception to changing the business model might be if the cash flow difficulty has been caused by one or two large bad debts.
What you're hoping for is that your employer will last a certain number of pay runs and what you're getting back in your salary sacrifice is partly eroded by your employer's failure to pay compulsory super.
It seems to me that your company's directors have long passed the line where they are trading whilst insolvent. Don't assume that if the decision is made to put the company into administration that there will be any grace period while the company keeps trading. The administrators will only keep trading if they are satisfied there is enough money coming in to cover the wages and costs of the business operating during that time. If they're on the way out you need to have your exit strategy in place too.
Also very few companies that go into administration come out the other side. Only about 20-25% of companies emerge from voluntary administration according to ASIC figures from the 1990s.
Some years ago a group I was working with looked at the voluntary admin path. In that sector the directors were only able to identify one company that had gone into voluntary administration and emerged where stakeholders made a substantial refinancing of the operation. Ultimately the group I was involved in decided to keep trading and with the support of its bank worked through it. But those decisions were based on extremely detailed cash flows and where there was a great deal of certainty about income coming in and because the bank was satisfied that the issues that had arisen that caused the shortage of cash in the operations had been dealt with 12 months earlier and that the operation was financially sustainable. In that sector there were more than 50 boards with similar issues at the same time. A number closed, some were taken over. Although there are no figures publicly available the scuttlebutt in the sector is that our entity has done best out of those 50 odd groups. But it involved a reinvention of the business model and the culture of the organisation, from that which had got the entity into financial difficulty. Unless your company is changing its business model, probably radically, it is unlikely to survive administration. The exception to changing the business model might be if the cash flow difficulty has been caused by one or two large bad debts.
