Impact of special administration on corporation staff
When a corporation goes into special administration, staff are not automatically dismissed.
The special administrator oversees the corporation and has the authority to retain, hire or dismiss staff.
Learn more about special administrations.
Staff who are dismissed
If staff are dismissed, they may need an employment separation certificate. This is through the Services Australia’s Employment Separation Certificate form.
The special administrator must prepare a separation certificate for staff whose employment ends during the special administration. They don’t have to prepare one for those who stopped working before the special administration started.
If staff were dismissed from the corporation and want to claim income support, Services Australia may be able to help with getting a payment.
Staff become creditors of the corporation if owed:
- wages
- superannuation
- annual leave
- sick leave
- long service leave
- redundancy pay
- other benefits.
Payment of these entitlements may be prioritised over other debts.
Staff who continue working for the corporation
The special administrator must pay wages and entitlements earned during the special administration to staff who still work at the corporation.
If the corporation lacks the funds, the special administrator must cover these payments.
The special administrator will try to pay wages and entitlements earned before the special administration started. There is no guarantee this will be possible if the corporation is in financial trouble.
If the special administration ends with the corporation going into liquidation, priority goes to paying staff entitlements. Staff may also be eligible to claim under the Fair Entitlements Guarantee (FEG) scheme.
Payment summaries
Most people need a PAYG payment summary (group certificate) to complete and lodge an income tax return.
When a special administrator pays staff, they must give them a PAYG payment summary. This shows the wages and entitlements paid and any income tax deducted.
Staff should contact the special administrator to find out:
- if they’ll get a PAYG payment summary for entitlements paid before the special administration started
- what period the PAYG summary will cover.
If an employee cannot get a PAYG payment summary, they can get help from:
- the Australian Taxation Office (ATO) on 13 28 61
- the ATO Indigenous Helpline on 13 10 30.