Insolvency and the Protection of Australian Employees Entitlements

The aim of this study is to critically analyse the effectiveness and adequacy of the Australian General Employee Entitlements Redundancy Scheme (GEERS) in providing protection for employee entitlements in the event of corporate insolvency. It surveys alternative models for protection of employee entitlements proposed and considered by the Howard Conservative Coalition Government (1996-2007) as well as alternative proposals from the then Australian Labor Party opposition. It includes a discussion of the Australian trade union advocated scheme, known as the National Entitlement Security Trust (NEST). GEERS is also evaluated against international models from developed and developing economies. This study concludes that the current regime of employee entitlement safeguards against corporate insolvency in Australia lacks a holistic approach and revision of the scheme is justified having regard to international benchmarks and conventions and impending industrial law challenges. In arriving at this conclusion this study makes the case for revision of GEERS and provides the essential elements of a revised scheme.