Q: How do I know if the worker is an independent contractor or an employee?
A: The Courts consider a range of factors when determining if a worker is an independent contractor or an employee. They are more likely to be an employee if they:
- receive close direction on how the work will be done
- are treated as part of the hirer’s enterprise, such as wearing uniforms and representing the business publicly
- get paid by the hour not by results
- receive leave, superannuation and other entitlements
- work at the hirer’s place of work
- have their income tax deducted by the hirer
- work directly for the hirer and do not provide similar services to the general public, advertise your services or tender for work.
You can visit Workplace Relations or your local state service for further information on how to determine an employee’s status.
Employees submitting a claim will usually be ineligible for a GEERS advance if they are contractors, sub-contractors or agents, rather than employees.
Q: How can I tell if the liquidated or bankrupt entity is the employee’s legal employer?
A: You can usually work out who a claiming employee’s legal employer is by using the circumstances test which considers the relationship between the employee and the employer by considering whether:
- the employer is named in any employment contract or other industrial instrument
- the employer is named on pay slips
- the employer is named on PAYG summaries
- any other documentation that describes the employment relationship.
These points are not exhaustive and other factors can also be taken into account to determine the legal employer.
Q: What advice should I provide to claimants in cases where the former employer’s assets have transferred to another entity and employees have been offered employment with the new owner?
A: Claimants should be informed that where the former employer’s interests or assets have been sold or otherwise transferred to a new operator, liability for outstanding employee entitlements may transfer to the new operator of the business. Where this is the case, and a claimant accepts employment with the new operator they would not usually be eligible for GEERS assistance.
Further, claimants should be advised that where a business has been sold or otherwise transferred to a new operator, a claimant will not be eligible under GEERS for payment in lieu of notice or redundancy pay if they receive an offer of employment from the new operator. The offer of employment must occur within 14 days of their termination and be on terms and conditions substantially similar to, and on an overall basis no less favourable than, the terms and conditions of employment provided by their previous employer.
In these situations, claimants may be able to access assistance under GEERS for these entitlements to payment in lieu of notice or redundancy pay, if:
- Their new employer enters liquidation and, as a result, they have their employment terminated by the new operator of the business. In this circumstance, in determining the claimant’s eligibility for payment in lieu of notice or redundancy pay, the Department will recognise the claimant’s service with their first employer, against which their initial GEERS claim was assessed; or
- The claimant is terminated at the initiative of the new operator of the business because the new operator no longer requires the job to be done by the claimant or to be done by anyone. In this circumstance, the claimant may be eligible to receive assistance under GEERS for payment in lieu of notice and redundancy pay which accrued during their service with the first employer.
Q: Once the claim has been approved for a GEERS advance, when will I receive the employee’s funds?
A: The advance will usually be transferred to your account within two days of receiving notification of payment from GEERS.
Q: Why has our invoice not been paid yet?
A: Payment for GEERS work will be made once the GEERS work is complete. Where you have only provided verification services but did not distribute the GEERS advance, the invoice will be paid when the Department is satisfied that all agreed tasks are completed and the GEERS decision maker has approved the case. Where you have provided verification and distribution services, the invoice will be paid once the Statement of Acquittal is received by the Department. If a signed acquittal spreadsheet has been forwarded please contact us.
Q: Why will you not accept an invoice for service fees from the business that is in liquidation?
A: The fees paid are for work undertaken on behalf of GEERS by you as the insolvency practitioner, not the company in liquidation. Invoices should appear on your firm’s letterhead.
Q: If funds become available during the insolvency process, do I need to repay the Department?
A: GEERS advances are treated as advances under the Corporations Act 2001 and the Bankruptcy Act 1966. This means that if funds become available during the insolvency process, the Department will seek to recover payments from the insolvent employer up to the amounts advanced under GEERS.
For more information, contact the insolvency practitioner managing your former employer's affairs, or contact GEERS on:
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