Access to GEERS the priority but public interest and best use of government funds to be considered
July 13, 2012
Developments related to the General Employee Entitlements Redundancy Scheme (GEERS) just keep coming with the Australian Securities and Investment Commission (ASIC) releasing a consultation paper outlining how it intends to implement its new power to wind up abandoned companies.
The consultation paper outlines how ASIC intends to exercise this new power, and how it will prioritise matters for winding up.
“When using this power, our first consideration will be if an order to wind up the company would facilitate employee access to GEERS,” Commissioner John Price says.
The commission notes that companies it deregisters in order to be wound up are very unlikely to be reinstated.
GEERS is a scheme funded by the Australian Government to assist employees of companies that have gone into liquidation and who are owed certain employee entitlements and was fast-tracked during the liquidation of 1st Fleet.
However, companies are sometimes abandoned by their directors without being put into liquidation, ASIC says.
This has previously resulted in employees of the company who are owed employee entitlements being unable to access GEERS.
This did not happen with 1st Fleet.
The consultation comes as robust debate ensued this week between employers and unions over this year’s spike in GEERS outlay, its cost to the public purse and the responsibility of managers.
Some of these concerns seem to have already been taken into account, with the commission proposing to apply a public interest test that will consider factors such as determining the best use of public resources, whether the cost of winding up will exceed the amount of employee entitlements, the amount of outstanding employee entitlements and how many employees are affected.
Last month, the Government was forced to rush through legislation formalising spending on a number of initiatives including GEERS.
The consulatation paper can be found here:
