What To Know When A Company Is Wound Up By Asic: A Guide For Employees

The Australian Securities & Investments Commission (ASIC) has specific powers to wind up companies under certain conditions. This process primarily takes place when a company is unwilling or unable to pay its debts. Employees of such companies often find themselves facing uncertainty regarding unpaid wages, leave entitlements, and other benefits owed to them.

ASIC steps in to help resolve these issues by ensuring fair treatment for employees. They appoint a liquidator to manage the company’s affairs, sell off assets, and distribute available funds to creditors, including the employees. When a company gets liquidated, many employees may not know what to expect or how to claim owed payments.

Affected individuals should familiarize themselves with the procedures surrounding insolvency. Initially, they must confirm that the company has indeed been wound up by checking ASIC’s public notices. From there, employees can contact the appointed liquidator for detailed information about the status of their claims.

While the process unfolds, the Government offers support through the Fair Entitlements Guarantee (FEG), which provides a safety net for certain unpaid entitlements. Employees may apply for FEG assistance if the liquidated company cannot cover outstanding amount owed. However, eligibility criteria and prefixed limits apply to the scheme.

Employers winding up doesn’t entirely negate the rights of the workforce. Knowing the legal framework and resources, such as legal aid and advisory services available, is crucial for employees to navigate this challenging period. ASIC’s role ensures not just regulatory compliance but also aims to protect workers to the greatest extent possible.

Read the full story by: asic.gov.au.