Superannuation Injustice: Migrants Excluded from Compensation Scheme

Superannuation News: Migrants Face Exclusion from Compensation Scheme

The closure of an American-themed restaurant in Melbourne’s suburbs left its employees, including second chef Jisan Palikhel, in a dire financial situation, with unpaid wages, annual leave, and superannuation totaling a staggering $230,000. When the restaurant collapsed in 2023 with substantial debts and no assets, recovery for the staff seemed bleak. Fortunately, many employees were able to seek recourse through the Fair Entitlements Guarantee (FEG), a government scheme designed to reimburse workers for lost entitlements in cases of insolvency.

Established in response to a significant corporate collapse in the past, FEG has been instrumental in providing financial support to workers affected by such situations. However, despite its noble intentions, the scheme falls short in fully addressing the needs of employees like Peter, a former Richstone worker, who found that FEG did not cover his outstanding superannuation contributions. This limitation underscores a critical issue within the system, as Peter and others are left grappling with uncertainties regarding their retirement savings.

A poignant aspect of the FEG’s operations is the exclusion of migrant workers from its coverage. Jisan Palikhel, a migrant on a visa, was denied compensation under FEG, unlike his Australian-born counterparts from the same workplace. This discrepancy highlights a systemic injustice that deprives migrant workers of essential protections afforded to citizens and permanent residents. The Migrant Workers’ Centre has rightly criticized this exclusion, emphasizing the need for equal treatment under the law for all workers in Australia.

The ongoing review of the FEG by the Department of Employment and Workplace Relations aims to address concerns surrounding corporate malpractice that exploit loopholes to evade responsibilities towards employees. Instances of phoenixing and asset shuffling have raised red flags, prompting calls for stricter regulations to prevent such unethical practices. The review presents an opportunity for policymakers to enhance the scheme’s effectiveness and sustainability while ensuring that it upholds its core purpose of safeguarding workers’ rights.

As the political landscape evolves, the debate over expanding FEG to include superannuation remains contentious. While some advocate for this extension to provide comprehensive protection for workers, others prioritize the scheme’s financial viability and its alignment with the interests of Australian taxpayers. The upcoming federal election holds significance in determining the future direction of FEG, with various parties offering divergent perspectives on its scope and coverage.

In conclusion, the plight of migrant workers like Jisan and the broader challenges faced by employees in recovering lost entitlements underscore the pressing need for a fair and inclusive compensation framework. As discussions around FEG’s reform intensify, the ultimate goal should be to create a system that upholds principles of equity, transparency, and social justice for all workers, regardless of their background or employment status.