Advising the Commonwealth, instructed by Norton Rose Fulbright.

By its implementation of the scheme established by the Fair Entitlements Guarantee Act 2012 (Cth), the Commonwealth Government provides financial assistance to eligible employees who lose their job due to the liquidation of their employer. The underlying public policy objective of the FEG Scheme is for it to constitute a safety net scheme of last resort for eligible, redundant workers.

These proceedings raised potentially significant public policy implications in the interplay between schemes of arrangement proposed pursuant to sections 411 and 413 of the Corporations Act 2001 (Cth) and the implementation of the FEG Scheme, particularly in the context of the fiscal support provided by the Commonwealth Government to corporate Australia during the COVID-19 pandemic. Whilst the Court recognised the novel nature of the interplay between the Ovato Schemes and the FEG Scheme, ultimately the Commonwealth did not oppose the application for approval of these schemes of arrangement, and the Court decided not to refuse to approve the Ovato Schemes on public policy grounds.

For further information, see NRF’s note and the judgments of Black J following the initial Convening Hearing and final Sanction Hearing.