Recent developments have seen Rex Airlines' administrators retrenching nearly 600 employees, placing them as priority creditors. This situation has highlighted the challenges many workers face when a company is unable to immediately repay entitlements, including payments in lieu of notice. For these workers, understanding their rights under the Fair Work Act 2009 (Cth) and the Fair Entitlements Guarantee (FEG) Scheme is crucial.
Immediate Impact on Rex Employees
The administrators have communicated that the company's financial position does not allow for the immediate repayment of entitlements. While Rex's regional service will continue, its capital city flights have ceased. A letter from the administrators reassured continuing employees that their terms and conditions would remain unchanged, and a preliminary calculation of entitlements will be provided soon.
However, for the 594 redundant employees, the reality is stark. They have become priority creditors and must wait for their entitlements to be resolved either through a deed of company arrangement or the FEG Scheme if the company is wound up.
Understanding the Fair Entitlements Guarantee (FEG) Scheme
The FEG Scheme provides a safety net for employees who lose their jobs due to their employer’s liquidation or bankruptcy. It covers up to 13 weeks’ wages, annual leave, long service leave, payment in lieu of notice (up to five weeks), and redundancy pay (up to four weeks per year of service). However, it does not cover unpaid superannuation, which employees must pursue as creditors.
The Department of Employment and Workplace Relations (DEWR) has noted an increase in FEG applications due to rising corporate insolvencies. Consequently, processing times have extended beyond the average of 14 weeks, with 2023-24 seeing an average processing time of 17.3 weeks.
The Role of the Fair Work Commission
The Fair Work Commission (FWC) is the body responsible for dealing with disputes arising under the Fair Work Act. It assists in resolving general protections disputes through conciliation, conferences, and hearings. The FWC can also issue orders to enforce compliance with the Act.
Conciliation and Hearings: In general protections disputes, conciliation is the first step. If conciliation fails, the matter may proceed to a formal hearing where the Commission will examine evidence, consider submissions, and make a legally binding decision.
What Can Retrenched Rex Workers Do?
For the retrenched Rex workers, the immediate steps involve understanding and applying for their entitlements under the FEG Scheme. Given the extended processing times, it is advisable to apply promptly and use the DEWR’s online portal for efficiency.
Additionally, retrenched workers should be aware of their rights under the Fair Work Act and consider seeking professional advice if they believe their termination involved a breach of these rights. The Fair Work Commission’s General Protections Benchbook can be a valuable resource in understanding these protections and preparing for any potential claims.
Conclusion
The situation faced by Rex Airlines' retrenched workers is a reminder of the importance of understanding workplace rights and entitlements. The Fair Work Act provides significant protections, and the FEG Scheme offers a crucial safety net. However, the process can be lengthy and complex, making it essential for affected workers to stay informed and proactive in securing their entitlements. At 1800ADVOCATES, we are committed to assisting employees in navigating these challenges and ensuring their rights are upheld.
Need to know your rights in an employment or human rights matter? Call us for a FREE consultation today.
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