unpaid super and wages

Discussion in 'Superannuation, SMSF & Personal Insurance' started by padi, 16th Jan, 2024.

Join Australia's most dynamic and respected property investment community
  1. padi

    padi Well-Known Member

    Joined:
    6th Oct, 2021
    Posts:
    109
    Location:
    NSW
    my employer hasn't paid our salary for a few months and super for 1 year plus.

    seeking help on what to do.

    superannuation: ato is already engaged. they are making the employer personally liable for it.
    question: when will i get my money back?

    salary:
    alr contacted 2 lawyers who advised different strategies, one told me to sue (but the enforcement is practically nill ) the other told me to go to court.

    another problem, the employer (a company) does not seem to have any asset (they are highly likely to be insolvent already).

    so i want to avoid the employer (the comp) from folding because i think that employee entitlements will come last, after ato and secured creditors.

    does anyone have any advice on what to do to recover my salary?

    tia
     
  2. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

    Joined:
    18th Jun, 2015
    Posts:
    42,147
    Location:
    Australia wide
    Not much you can do. Stop working for them already?
    Directors could be personally liable for super
     
  3. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

    Joined:
    14th Jun, 2015
    Posts:
    10,686
    Location:
    Gold Coast (Australia Wide)
    Pretty sure that employees come ahead of the ATO, not a legal or liquidations person though.

    Liquidator comes first as one would expect.

    Whats the biz do and what does the future look like ?

    Whats your relationship with the owners like ? Stretched I assume.

    ta
    rolf
     
  4. padi

    padi Well-Known Member

    Joined:
    6th Oct, 2021
    Posts:
    109
    Location:
    NSW
    how about salary?
    better to sue? or court?
     
  5. padi

    padi Well-Known Member

    Joined:
    6th Oct, 2021
    Posts:
    109
    Location:
    NSW
    likely to be insolvent.
    maintained good relationship, ex employer wants to pay but genuinely no money.
    business is a tech start up, being swindled by an ex employee, thus no money.
     
  6. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

    Joined:
    14th Jun, 2015
    Posts:
    10,686
    Location:
    Gold Coast (Australia Wide)

    gaawd feel for all of you.

    Insolvent is a moment in time thing though, what does it look like in 6 to 12 months time ?

    Ex employee needs to be disabled from whatever they are doing ?

    ta
    rolf
     
    padi likes this.
  7. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

    Joined:
    18th Jun, 2015
    Posts:
    42,147
    Location:
    Australia wide
    I don't think personally liable for salary. if you sue and win then what? You will have to enforce the judgment. Does the company own any assets?
     
  8. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

    Joined:
    18th Jun, 2015
    Posts:
    42,147
    Location:
    Australia wide
    Company could potentially recover money from ex employee and then use that to pay wages
     
  9. padi

    padi Well-Known Member

    Joined:
    6th Oct, 2021
    Posts:
    109
    Location:
    NSW
    company and director have no assets.
    thinking of garnishee future earnings to recoup
     
  10. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

    Joined:
    18th Jun, 2015
    Posts:
    42,147
    Location:
    Australia wide
    How will the company get more earnings? Is it trading and do you think it will keep trading?

    sounds like it might be insolvent.
     
  11. padi

    padi Well-Known Member

    Joined:
    6th Oct, 2021
    Posts:
    109
    Location:
    NSW
    comp is still trading,
    even though it's highly likely insolvent (has been like so for close to 2 years. thus likely will continue trading).

    if only my husband (not all other employees) pursue in court for outstanding salary, in order
    to avoid putting into liquidation. (bc if liquidate, employee won't get any),
    ( if won) thw pay back is thru future earnings.

    if only my husband pursue, asic won't be alerted (for trading while insolvent).

    court not suing, because court order has the mandate to ensure compliance (the garnishee of future earnnings).
     
  12. padi

    padi Well-Known Member

    Joined:
    6th Oct, 2021
    Posts:
    109
    Location:
    NSW
    clarification

    It's actually my husband's employer who doesn’t pay him and other employees.
     
  13. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

    Joined:
    18th Jun, 2015
    Posts:
    23,659
    Location:
    Sydney
    There are some remedies. Its a slow process as its a legal matter. ATO have vastly impoved the process and it takes time. If the employer uses Single Touch Payroll the ATO know exactly what is due. If there are gaps they also know. And will seek the employer to lodge this...and pay. If they dont it escalates and can be assessed to each DIRECTOR of a company or employer.

    1. Ensure you lodge a claim with ATO for unpaid super. Copies of payslips may assist to indetify the totals. ATO has the data anyway. They account for it !! You will then wait and hear NOTHING. Privacy issues etc.
    2. If it more than super eg unpaid wages etc lodge a Fair Work claim as a group of employees. Fair Work enforce employment laws. Its like a court. Major penalties can be imposed. You have protections if you make a claim. Major penalties apply if they seek to pressure you in any way. Termiantion - Thats a fresh claim for wrongful ermiantion. Fair Work can impose large fines and unpaid matter are a clear issue. More likley Fair Work will order the employer to comply.
    3. Find a new job. You employer is scum
    DONT - Engage lawyers or go to court. Its costly and wont achieve much. Allow Govt to do this for you.

    The ATO will issue notices to the employer to lodge a SGC (Super guarantee charge) statement. If they dont ATO will assess which is even worse (same value but with hefty penalty). Its also a Director Penalty Notice trigger. In due course when the SGC is assessed and paid you will receive interest that backdates for each unpaid quarter to the start date of that quarter and it compounds daily and its 10%. In time the ATO will credit your fund and advise you. Its slow but is now a solid system. ATO retain accounting for unpaid employer super in real time. Its only visible to employers or tax agent. Had one recently and they had it correct to the cent. If the ATO dont get funds they can wind up the company triggering liquidation perhaps. Super isnt a liquidators debt. It is that of the Director/s. One or all of them. Changing Directors wont help.

    If they go down the path of insolvency then the system is also protected. Worst case it becomes a protected entitlemnet the Govt may meet. It has limits
    https://www.dewr.gov.au/general-emp...eme-geers/i-have-unpaid-employee-entitlements
    This scheme excludes super because of the personal liability that attaches to such a event. ATO can and will seek bankruptcy of individuals and seek their assets incl matrimonial property. ATO see a liquidator or adminstrator being appointed by Directors as a trigger to send that letter. Its likley tax debts have accumulated and the whole picture is considered by ATO.
     
    Redwing, The Y-man and mrdobalina like this.
  14. padi

    padi Well-Known Member

    Joined:
    6th Oct, 2021
    Posts:
    109
    Location:
    NSW
    Fair Work doesn't want to pick up the case, as his is not award wages.
    They advised to go to court for this.
     
  15. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

    Joined:
    18th Jun, 2015
    Posts:
    23,659
    Location:
    Sydney
  16. The Y-man

    The Y-man Moderator Staff Member

    Joined:
    18th Jun, 2015
    Posts:
    13,590
    Location:
    Melbourne
    Just remember even with "no win no fee" lawyers, if you do win, you will may get nothing becasue that's what the lawer fees will be....

    The Y-man
     
  17. padi

    padi Well-Known Member

    Joined:
    6th Oct, 2021
    Posts:
    109
    Location:
    NSW
    cost to be born by employer ?
     
  18. The Y-man

    The Y-man Moderator Staff Member

    Joined:
    18th Jun, 2015
    Posts:
    13,590
    Location:
    Melbourne
    Check the contract with lawyer carefully if you ever go down that path.

    The Y-man
     
    padi likes this.
  19. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

    Joined:
    18th Jun, 2015
    Posts:
    23,659
    Location:
    Sydney
    Many law firms have engagements which seek to impose income based recovery the employers bears. Fair Work will allow that as the onus is upon a employer to pay all debts and income as and when it falls due and if they dont FW consider the employee should not be disadvantaged a cent. The cost is a responsbility based consequence that ranges from mistake trough to negligence and alleged theft. Agree to check the engagement says that.
     
  20. padi

    padi Well-Known Member

    Joined:
    6th Oct, 2021
    Posts:
    109
    Location:
    NSW
    All been paid now.
    After many months of drama.
     
    craigc, Gockie, Terry_w and 2 others like this.

Build Passive Income WITHOUT Dropping $15K On Buyers Agents Each Time! Helping People Achieve PASSIVE INCOME Using Our Unique Data-Driven System, So You Can Confidently Buy Top 5% Growth & Cashflow Property, Anywhere In Australia