WA Employment Law - Workforce Stood Down Indefinitely?

[Brett Patrick]

The company I work for has been placed into receivership. All trading has been suspended and the receiver has stood down the entire workforce, without pay pending negotiations with prospective buyers.

As stated in the letter to employees- Quote, All employees are stood down without pay effectively immediately. unquote. Is this actually legal? What are the workers rights in this situation? Will questioning the legality of this action with the receiver simply force his hand and he would take the easy way out and terminate everyone?

I feel we are being lied to by the receiver.

Under employment law, is the letter stating we have been stood down proof enough that the receiver has taken this action?

 

[Rob Legat - SBPL]

You might want to read this Information Sheet from ASIC:
http://download.asic.gov.au/media/1342856/Receivership_guide_for_employees.pdf

Basically, a receiver is appointed on behalf of a secured creditor and acts in their interest, or may be appointed by a Court. To the extent that you're owed entitlements you're an unsecured creditor of the company; but with special priority privileges.

The receiver makes decisions about the best way to get the appointing creditor paid - which includes continuation of trading and sale of the company; or it could be the company's liquidation.

It sounds like the receiver has decided continued trading is not viable. In that case they're well within their rights to terminate all employees immediately. If the receiver were to continue the employee relationship, they could become personally liable for payment of wages and entitlements from their appointment.

They are under no obligations to report to you about the receivership.