What happens to employees when a company goes into voluntary administration

When a company goes into voluntary administration, employees do not automatically lose their jobs. The administrator takes control and decides whether the business keeps trading. Staff who keep working are paid for work done after the appointment as an expense of the administration. Entitlements owed from before the appointment, such as unpaid wages, leave and redundancy, are generally not paid during the administration. What happens to them depends on whether the company is handed back, enters a deed of company arrangement, or is liquidated.

What changes on the day of the appointment

• Employment continues. The appointment does not terminate employment.
• The administrator is in charge. The administrator takes over the powers of the company and its directors, and decides whether the business keeps trading and which roles it needs.
• Work done from now on is paid. If the business trades on, the administrator must pay employees for services after the appointment, as an expense of the administration.
• Older entitlements wait. Wages, leave and other amounts owed from before the appointment are generally not paid during the administration.

What happens to entitlements owed from before the administration

The order employees are paid in

In a liquidation, and in a deed of company arrangement unless employees agree otherwise, employee entitlements are paid after the costs of the administration, and in this order:

1. wages and superannuation;
2. leave; then
3. retrenchment (redundancy) pay.

Each class is paid in full before the next. If there is not enough to pay a class in full, it is paid proportionately and later classes receive nothing.

The Fair Entitlements Guarantee

The Fair Entitlements Guarantee (FEG) is a government safety net for employees who lose their job when their employer goes into liquidation or bankruptcy. It is not available while a company is in voluntary administration or under a deed of company arrangement. It only becomes available if the company is liquidated.

Other eligibility rules and caps apply, and FEG has strict cut-off times for claims. Check the Department of Employment and Workplace Relations’ FEG page for current details.

Employees are creditors too

• Lodge a claim. Send the administrator a claim for what you are owed before the creditors’ meeting.
• Vote. Employees owed money can vote at creditors’ meetings, including the meeting that decides the company’s future.
• Ask for information. You can request reasonable information, reports and documents from the administrator.
• Keep records. Payslips, contracts and leave records will help if your claim is questioned.

For directors: unpaid super is a personal risk

Unpaid super guarantee charge is covered by the director penalty regime, so directors can become personally liable for it. Appointing an administrator within 21 days of a non-lockdown director penalty notice remits the penalty. See voluntary administration and DPNs and super guarantee DPNs.

For the wider process, see our voluntary administration guide and what happens after voluntary administration.

Common questions

Do employees lose their jobs when a company goes into voluntary administration?

Not automatically. The appointment of an administrator does not terminate employment. The administrator takes control of the company and decides whether the business keeps trading and which staff it needs.

Will I be paid while the company is in administration?

If the business keeps trading and you keep working, the administrator must pay you for work done after the appointment. Those payments are an expense of the administration.

What happens to wages and leave owed from before the administration?

They are generally not paid during the administration. Whether and how they are paid depends on the outcome: the directors must pay them if the company is handed back; a deed of company arrangement must give them the same priority as in a liquidation unless eligible employees agree otherwise; and in a liquidation they rank ahead of ordinary unsecured creditors.

Can I claim the Fair Entitlements Guarantee during voluntary administration?

No. Employees are not eligible for the Fair Entitlements Guarantee while the company is in voluntary administration or under a deed of company arrangement. It only becomes available if the company goes into liquidation.

What about unpaid superannuation?

Unpaid superannuation is not covered by the Fair Entitlements Guarantee. Employees can report unpaid super to the ATO.

Can employees vote at creditors’ meetings?

Yes. Employees who are owed wages, super, leave or other entitlements are creditors. They can lodge a claim with the administrator and vote at creditors’ meetings.

Sources: Corporations Act 2001 (Cth) Part 5.3A and section 556; ASIC, Voluntary administration: A guide for employees (INFO 75); Department of Employment and Workplace Relations, Fair Entitlements Guarantee. This page is general information, not advice about your circumstances. Last reviewed: 16 October 2026.