Scheme marred by Government greed

Date: 14 April 2000

The Government has placed its needs above the needs of Australia's most vulnerable workers with its restricted safety net scheme.

The operational guidelines for the Employee Entitlements Support Scheme, which were released this week, reveal that the Government will force employees to take a back seat when claiming debts from a company that has folded.

ACTU Secretary Greg Combet said the new requirement had not been flagged by Workplace Relations Minister Peter Reith before this week.

"Mr Reith's safety net for employee entitlements has the potential to give with one hand and take with the other," said Mr Combet.

"Under the scheme, the Government may pay out some money to an employee, but the Government requires employees to agree that the Government takes priority over the employee in recovering money from the insolvent employer.

"This scheme is seriously flawed as a result. Firstly, an employee can only claim up to $20,000 with no superannuation or sick leave provision. Then, before the money is paid, Mr Reith will force workers to give the Government priority over employees for any remaining company funds.

"Why does Mr Reith think the Government's needs are greater than a worker who is left without a job? If there is any money left after the secured creditors have been paid, it may go to the Commonwealth before the employee.

"This is another example of Mr Reith operating by stealth. There was no indication of this until the guidelines came out this week. If this is an oversight, these guidelines must be redrafted," said Mr Combet.

Mr Combet called on Mr Reith to:

• Clarify the Government's position on priority claims
• Scrap the provision that places safety net payments at the Government's discretion in favour of automatic payment
• Institute an independent appeal mechanism for workers whose claims are rejected.

For further information

Contact:	ACTU Media Office: Brenda Finlayson 0413 507 260
Union:	ACTU
WWW:	http://www.actu.asn.au/

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