(Cth) Extend Protections to Temporary Migrant Workers in the Case of Employer Insolvency

Harriett Cox, Eliza Kral, Pema I’Anson & Henry Turner
Aug 25
7 min read

Author: Harriett Cox, Eliza Kral, Pema I’Anson & Henry Turner | Publish date: 25/8/2026

P: In Australia, temporary migrant workers are ineligible for the Fair Entitlements Guarantee (FEG) if their employer becomes insolvent.
S: The Minister for Employment and Workplace Relations should amend Section 10(1)(g) of the Fair Entitlements Guarantee Act 2012 (Cth) to substitute ‘the holder of a permanent visa or a special category visa’ with ‘the holder of a permanent, special category or temporary migrant visa’.
E: Migrant Workers Centre (MWC) (2025): ‘Implement Recommendation 13 of the Migrant Workers’ Taskforce Report (2019) to extend the coverage of the Fair Entitlements Guarantee to temporary migrant workers.’

Problem Identification:

Section 10(1)(g) of the Fair Entitlements Guarantee Act 2012 (Cth) outlines that ‘[holders] of a permanent visa or a special category visa’ are eligible to access benefits through the FEG. However, temporary visa holders (TVHs) are excluded.

According to the MWC, ‘this reflects a significant gap in protections for a large proportion of workers in Australia.’ The MWC stated that excluding TVHs ‘places immediate pressure on their ability to provide basic necessities’ and ‘normalises the exploitation of migrant workers’.

Context:

The FEG refers to a federal scheme which provides a ‘statutory right for certain employees of insolvent employers to recover unpaid employment entitlements’. This includes wages, annual leave, redundancy pay, and long service leave. The MWC stated that the FEG ‘provides a critical safety net’.

‘Illegal phoenix activity’ refers to ‘a new company [continuing] the business of a [liquidated] company … to avoid paying outstanding debts, including unpaid taxes and employee entitlements.’ The MWC reported ‘illegal phoenixing is a “common practice” amongst labour hire companies that engage temporary workers.’

In 2019, the Australian Government agreed to ‘examine’ the Migrant Workers’ Taskforce Report (2019) recommendation to expand the FEG to temporary migrant workers. However, Unions NSW and the MWC reported that legislative changes are yet to be actioned.

Arguments:

As stated by Kevin Davis, Emeritus Professor of Finance from the University of Melbourne, ‘the financial hardship resulting from loss of entitlements’ for temporary migrant workers ‘is undoubtedly severe.’ The MWC reported that ‘exclusion of [TVHs] from the FEG deprives them of essential financial protection’. WEstjustice shared a case where a worker ‘wasn’t paid’ for 6 weeks and after the business was sold, the new employers ‘alleged the debt was owed ... by the previous owners.’ By the time legal advice was obtained, WEstjustice reported the company had been ‘de-registered,’ leaving ‘no avenue … to recover … entitlements.’

Unions NSW reported that the barring of migrant workers from accessing the FEG is ‘discriminatory and perpetuates a culture of migrant worker exploitation’. The MWC argued that TVHs are deterred from seeking redress due to the ‘precarious nature of their migration status’, ‘fears of employer retaliation [and] potential visa complications’. As noted by JobWatch Legal Practice, the FEG scheme excluding migrant workers ‘amounts to authorised race and/or national extraction discrimination and is without justification.’

The MWC reported that ‘exclusion of [TVHs] from the FEG incentivises illegal “phoenix” activity’. The MWC noted that excluding TVHs from the FEG ‘results in lost intelligence on predatory corporate practices [such as phoenixing] that would otherwise be captured through the … claims process’.

The Migrant Workers’ Taskforce stated that the ‘additional costs of extending the scheme to cover migrants would be … $20 million per year.’ They, however, argued that ‘these costs would be reduced … the more successful the Government is in dealing with phoenix traders.’ Further, Unions NSW stated ‘the Government cost from unpaid taxes and compliance’ in relation to illegal phoenix activity is approximately $1.6 billion p.a.

Advice/Solution Identification:

The MWC, Unions NSW and WEstjustice have called for the FEG Act to be extended to temporary migrant workers. The MWC said that this ‘would not only safeguard [TVHs] from financial hardship but also help deter against exploitative business practices.’

Precedent:

There is an international precedent for extending employment entitlements to temporary migrants. In Canada, eligibility for the Wage Protection Program is determined by employment status rather than visa status. In the UK, all employees with working rights are eligible to apply for the Redundancy Payments Service.

Public Support of the Solution:

(This list reflects publicly stated positions and should not necessarily be taken as endorsement of this specific brief.)

The following organisations endorsed the Migrant Workers Centre’s 2025 submission responding to the ‘Addressing corporate misuse of the Fair Entitlements Guarantee’ discussion paper.

News Coverage:

9News - “'I was gutted': British IT worker calls out 'unfair' Australian workplace law”. This article reported on a case involving a British migrant on a working holiday visa who was ineligible for entitlements after her employer liquidated. By: Emily McPherson | 12 February 2025 - Read the article here.
ABC News - “Migrant workers unable to recoup lost wages after grocery delivery start-up Send liquidates”. The article examined how, following the liquidation of Send, many employees holding temporary visas were unable to access unpaid wages and entitlements due to the classifications of the FEG scheme. By: Sally Brooks | 11 June 2022 - Read the article here.
The Conversation - “When companies go bust, temporary visa holders miss out, and that’s wrong”. This article compared the FEG scheme’s exclusions with other federal government compensation schemes and workplace protection principles, noting its inconsistency. By: Kevin Davis | 17 July 2020 - Read the article here.
Human Resources Director - “Migrant workers ‘ineligible’ for wages they were owed – but why?” This article reported on the liquidation of Send and the subsequent financial impact this had on their employees who held temporary visas. By: Paulinet Tamaray | 17 June 2022 - Read the article here.

Where to go to learn more:

(2025) Expanding the Fair Entitlements Guarantee | Migrant Workers Centre - This policy brief called for the expansion of the FEG to include temporary migrant workers to ensure entitlements if the employer becomes insolvent. Read the policy brief here.
(2023) Navigating Unfairness: The exclusion of temporary migrants from the Fair Entitlement Guarantee | Unions NSW - This report recommended the FEG should be expanded to protect temporary migrants and cover unpaid superannuation, and called for the establishment of migrant worker centres to provide guidance to migrant workers. The report provided cases for each recommendation. Read the report here.
(2019) Report of the Migrant Workers’ Taskforce | Department of Employment and Workplace Relations - This report recommended expanding the eligibility of FEG to include migrants with work rights. Read the report here.
(2017) Reforms to address corporate misuse of the Fair Entitlements Guarantee scheme | Australian Government - This consultation paper examined options for law reform to reduce misuse of FEG. View the consultation paper here.
Fair Entitlements Guarantee Act 2012 (Cth) - Read the full Act here.

Human Perspective:

Mei was an international student completing an undergraduate degree while working part-time at a cafe. She balanced her shifts with university, relying on her wages to cover rent and daily expenses. After a few months, her pay became irregular and then stopped altogether, with her employer assuring her for several weeks that it would be sorted ‘next week’. She kept working, not wanting to lose the job and trusting that the missing wages would eventually come through. Suddenly, it was announced that the cafe ownership was changing hands, and Mei didn’t get a chance to speak to her old employers before the changeover happened. When the new owners took over the business, Mei raised the issue of her unpaid wages, but she was told they were not responsible for any debts, including the weeks of pay, penalty rates and superannuation she was owed. After that conversation, she noticed her shifts stopped appearing on the roster. Mei fell behind on her coursework while trying to balance finding another job and recovering her unpaid wages. When Mei learned she wasn’t eligible for the Fair Entitlements Guarantee because of her student visa, she felt stuck. Without a reliable income, she began falling behind on rent and was forced to cut back on food, distracted by the uncertainty of how she would recover the money she had already worked for but had not received.

To protect the anonymity of those involved, this is a fictionalised account drawn from an amalgamation of real-life stories, experiences and testimonials gathered during the research process for this brief. Any resemblance to actual individuals is purely coincidental.

Conflict of interest/acknowledgment statement:

N/A.

Support

If your organisation would like to add your support to this paper or suggest amendments, please email Info@foreaustralia.com.

Disclaimers

Please review all FORE disclaimers here.

Reference list:

Australian Council of Trade Unions. (2023). Temporary migration – Changing our system. https://www.actu.org.au/wp-content/uploads/2023/12/Congress24_Temporary-Migration-Changing-our-System.pdf

Coates, B., Wiltshire, T., & Reysenbach, T. (2023). Short-changed: How to stop the exploitation of migrant workers in Australia (Report No. 2023-07). Grattan Institute. https://grattan.edu.au/report/short-changed/

Davis, K. (2020, July 17). When companies go bust, temporary visa holders miss out and that’s wrong. The Conversation. https://theconversation.com/when-companies-go-bust-temporary-visa-holders-miss-out-and-thats-wrong-142281

Department for Business and Trade. (n.d.). Claim for redundancy and other money you’re owed by an employer. UK Government. https://www.gov.uk/claim-redundancy

Department of Employment and Workplace Relations. (2019). Report of the Migrant Workers Taskforce. Australian Government. https://www.dewr.gov.au/migrant-workers-taskforce/resources/report-migrant-workers-taskforce

Department of Employment and Workplace Relations. (2026, March 26). Fair Entitlements Guarantee. Australian Government. https://www.dewr.gov.au/fair-entitlements-guarantee

Fair Entitlements Guarantee Act 2012 (Cth). https://www.legislation.gov.au/C2012A00159/latest/text

Fair Work Ombudsman. (2026). Visa holders and migrant workers – Workplace rights and entitlements [Fact sheet]. Australian Government. https://www.fairwork.gov.au/sites/default/files/migration/723/visa-holders-and-migrant-workers-workplace-rights-and-entitlements.pdf

JobWatch Legal Practice. (2017). Reforms to address corporate misuse of the Fair Entitlements Guarantee scheme. https://treasury.gov.au/sites/default/files/2019-03/JobWatch.pdf

Johnson, A., & Anderson, B. (2025, February 28). TGIF 28 February 2025 – Discussion paper released on corporate misuse of the Fair Entitlements Guarantee. Corrs Chambers Westgarth. https://www.corrs.com.au/insights/discussion-paper-released-on-corporate-misuse-of-the-fair-entitlements-guarantee

Migration Council Australia. (2016). The economic impact of migration. https://welcomingcities.org.au/wp-content/uploads/2016/11/MCA-The-Economic-Impact-of-Migration-2015.pdf

Migrant Workers Centre. (2022, August 31). Expanding the Fair Entitlement Guarantee. https://www.migrantworkers.org.au/expanding_the_feg

Migrant Workers Centre. (2025). RE: Addressing corporate misuse of the Fair Entitlements Guarantee [Discussion paper response]. https://circlegreen.org.au/wp-content/uploads/2025/09/MWC-Final-Submission-to-DEWR-CG-endorsement.pdf

Migrant Workers Centre. (2025, March 6). Call for urgent reforms: Time to protect all workers under the Fair Entitlements Guarantee [Media release]. https://www.migrantworkers.org.au/media_release_feg

UnionsNSW. (2023). Navigating unfairness: The exclusion of temporary migrants from the Fair Entitlement Guarantee. https://www.unionsnsw.org.au/wp-content/uploads/2023/11/navigatingunfairness_web.pdf

Wage Earner Protection Program Act, S.C. 2005, c. 47. Government of Canada. https://laws-lois.justice.gc.ca/eng/acts/W-0.8/section-5.html

WEstjustice. (2017). Reforms to address corporate misuse of the Fair Entitlements Guarantee scheme [Submission]. https://www.westjustice.org.au/cms_uploads/docs/westjustice-submission-to-the-feg-scheme-consultation.pdf