Is there a prescription in recovery of securities procedures that employee entitlements are given a higher priority in respect of any fixed and floating charge security a bank holds (not including fixed mortgage security); if so, what is the current prescribed process.

The Corporations Act provides that in any corporate receivership or controllership most employee claims are given priority over any floating charges. They do not have priority over fixed charges granted in favour of a creditor.

As part of the Government’s announced Protecting Worker’s Entitlements Package, the ranking of employee creditors in personal insolvencies will be improved to bring their ranking into line with the priority given to employee creditors in corporate insolvencies.