Dick Smith Company had employed around 3,300 people. This was spread across Australia New Zealand. Total of 393 stores of Dick Smith were preempted to be closed leading to probable large scale employment. The jobs are at risk, until buyers for the business are found. The employees are risk losing their jobs. But the positioning of the employees is a tricky concept in receivership. The primary role of the receivership is to ensure that the secured creditors are paid. They need to ensure that they pay out the money that was lawfully obtained by the company. They need to pay out the money collected by law and report to ASIC for any offenses or irregularities. According to the law, receivership has no obligations to report to the employees.
In this notion, if there are insufficient funds, then the money from realization of the assets are distributed from the sale of the fixed charge to the secured creditor. Receivership most, certain priority claims such as employee entitlement pays. In cases, where the employee entitlements are paid under floating charge the payments are paid in the order of wages, superannuation, leave of absence then pay for retrenchment of the employee. Each class of entitlement much be paid in full before considering the next class. These are the various clauses in which the employees of the company might get paid (Latimer, 2012). It is assumed that Ferrier Hodgson would follow the same mandated protocols in paying the employee wages.
For this process, the employee should fill out the employee entitlement form, income tax return, and show how they are entitled to wages under the FEG and GEERS. They need to obtain written authentication that they indeed should be given money. Regarding the time of money being settled they can work out the deals with the receiver. But in cases of the receiver rejecting the claim employee should seek legal action.
In the cases, the employees of firms that had gone into liquidation Australian government provide certain remedial measures. In the year 2012, the Fair Entitlements Guarantee Act 2012 was to enable the workers to get some of remediation from the government.