Are employees entitled to more?

George Lopez, chair of CPA Australia's insolvency and reconstruction committee reported in Australian CPA (November 2001) on the replacement of the Commonwealth Government Employee Entitlements Support Scheme (EESS) with a new scheme, the General Employee Entitlements Redundancy Scheme (GEERS). Both schemes provide a safety net by which government pays employees their service entitlements and then takes the employees' place in claims against the insolvent employer organisation. Such schemes are fundamentally inequitable as ultimately they require taxpayers and shareholders to foot the bill for the mistakes, excesses, misdemeanours or incompetence of employers. Similar arrangements have been proposed in the past. For instance, the Australian Law Reform Commission's Harmer Report (1988) contained a recommendation that a wage earner (fidelity-type) protection fund be established. In the state of Victoria, local government legislation already exists to ensure that long service leave entitlements are funded.