19 April 2000

National Employee Entitlement Support Scheme - minimal safety net - not full entitlements

For over two years now the QNU has been lobbying the state and federal governments for a national scheme to protect the entitlements of employees against corporate insolvencies. QNU members employed at the St Andrews Hospitals in Rockhampton and Yeppoon, the Carrington Nursing Home in Clayfield and now Centrepoint Hospital in Brisbane have all lost entitlements due to corporate insolvency.

After months of delays and growing pressure from union members in early February the federal government announced details of its National Employee Entitlement Support Scheme (NEESS).

This scheme will only cover employees dismissed through their employer's insolvency since January 2000. The much-publicised exception to this is the National Textiles case where a separate (and more beneficial) arrangement has been made. These workers will receive their full entitlements.

Under NEESS employees will be entitled to a maximum of 29 weeks pay (at ordinary time rates) for unpaid entitlements made up of:

Up to 4 weeks unpaid wages Up to 4 weeks annual leave accrued in the last year Up to 5 weeks pay in lieu of notice Up to 4 weeks redundancy pay Up to 12 weeks long service leave

The maximum amount payable has been capped at $20 000. There has also been a ceiling of $40 000 per year put on the rate at which unpaid entitlements will be paid out.

At the same time the federal government has also announced changes to the Corporations Law that will increase penalties to persons who trade when insolvent.

This new scheme is welcomed. However, the QNU has great concerns about the minimalist safety net approach to this issue. In our view caps and limits on payouts discriminate against long-term employees given that their accrued entitlements are likely to exceed the capped amount. We have made this point in our numerous submissions to government and have always recommended a National Insurance Scheme that would cover all entitlements owed to workers in cases of corporate insolvency. The QNU supported the ACTU proposal for a compulsory Wages Guarantee Fund, funded by a very small levy on employers. We believe there is a collective moral obligation for employers to provide comprehensive protection for workers' entitlements.

It is our view that anything less than payment of full entitlements is not a fair go for Australian workers. Without this protection our long-term financial security cannot be assured.