A series of well publicised corporate collapses has focused the minds of policy makers, business representatives, unionists and academics on the problem of how best to protect the entitlements owed to employees of a failed enterprise. The Federal Government has developed a two track policy – strengthening, on the one-hand, the insolvency provisions of the Corporations Law and, on the other, putting in place the ‘Employee Entitlements Support Scheme’ (EESS) to provide up-front payments to eligible workers. The EESS is fully funded by taxpayers at a three year cost of $135 million.
These policies are premised on the idea of market failure: some firms go bad, the State should step in. In an era where free-market ideology has been so deeply accepted, so that even the tea-lady day-trades, this seems a less than sanguine response. This paper attempts to posit an alternative, market-based solution where unions, government and the finance industry can all play a role. The aim is to develop a model for the securitisation of employee entitlements.