This information will help you provide accurate advice to the Department about any transmission of business, Deed of Company Arrangement or Personal Insolvency Agreement.
It is important that the integrity and transparency of GEERS is maintained at all times. To assist the GEERS case manager to make informed and consistent decisions, it is important that you provide the Department with all relevant information regarding the insolvency that could affect the eligibility of employees or the recovery rights of the Commonwealth.
Transfer of business and Fair Work
Fair Work will support the new workplace relations laws and will oversee the practical operation of the Fair Work Act 2009. The Fair Work Act 2009, introduced on 1 July 2009, features a definition of a transfer of business that is simple and easy to understand and which delivers broader protection for employees’ terms, conditions and entitlements.
Fact sheets are available on the new workplace relations system, including information explaining the impact of Fair Work on transfer of business.
GEERS is not intended to provide assistance where employers seek to restructure the business, or where a contract for sale of the business removes the employer’s responsibility from meeting employee entitlements. To prevent this from occurring, and in order to accurately process claims, it is important that you notify the Department if a transfer of business from an employer to a new employer has taken place, or if there are reasons to suggest any of these events will occur. You should do this even if you have terminated the employees' employment.
There will be a transfer of business from an employer to a new employer if:
- the employment of an employee of the old employer has terminated
- within three months, the employee is employed by the new employer
- the transferring employee performs the same, or substantially the same, work for the new employer as for the old employer, and
- there is a connection between the old employer and the new employer.
Deed of Company Arrangement (DoCA) or Personal Insolvency Agreement (PIA)
If a DoCA or PIA has preceded the liquidation or bankruptcy then:
- Where an employer was subject to a DoCA in the 12 months preceding the insolvency event, employees will only be eligible for GEERS assistance if the DoCA applied Sub-Division D, Division 6, Part 5.6 of the Corporations Act 2001 to any distribution made under the Deed, and if the DoCA provided for the distribution of all available funds or assets; or
- Where an employer was subject to a PIA, this agreement must include the same priorities as section 109 of the Bankruptcy Act 1966.
The Commonwealth’s recovery rights must be protected. Please note that if the DoCA or PIA does not meet the provisions stated in the GEERS Operational Arrangements (OAs), claims for GEERS assistance may be rejected, or advances may be withheld until such time as appropriate changes to the DoCA are made.
For more information, please contact GEERS on:
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