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Employee entitlements: the facts.

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Media Release


Employee entitlements - The facts

It is important to put the issues of employee entitlement and loss of entitlements in their proper context.

In any one financial year, according to current data from a Productivity Commission Research Paper of December 2000, less than one half of one percent of businesses go into bankruptcy or liquidation, and around one tenth of one percent of all employees lose their employment due to enterprise failure. The proportion of employees who lose any of their entitlements would be less than that.

For those people who lose entitlements, the situation can be devastating. But, a national entitlement scheme supported by the Federal Government exists.

The Commonwealth originally estimated that on a long term trend basis about 19,000 employees annually might lose about $110 million in entitlements from insolvency - or an average amount lost per employee of around $5,700.

Experience with the Employee Entitlements Support Scheme indicates that the demand is much lower than anticipated. The figure for lost entitlements would appear to be closer to $40 - $50 million a year, though this will depend on long term economic cycle trends.

As at 31 July 2001, the Federal Government has paid almost $9 million in lost entitlements to almost 4500 former employees of about 450 insolvent companies.

If all the States and Territories had contributed the amount paid would have been almost $18 million.

The Employee Entitlements Support Scheme has been in operation with effect from 1 January 2000. It is the first and only national scheme to provide for workers who lose their entitlements.


For further information contact:

Simone Holzapfel  0417 656 668