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This is a Bill, not an Act. For current law, see the Acts databases.
2016-2017-2018
The Parliament of the
Commonwealth of Australia
HOUSE OF REPRESENTATIVES
Presented and read a first time
Corporations Amendment
(Strengthening Protections for Employee
Entitlements) Bill 2018
No. , 2018
(Treasury)
A Bill for an Act to amend the law relating to
protecting employee entitlements, and for related
purposes
No. , 2018
Corporations Amendment (Strengthening Protections for Employee
Entitlements) Bill 2018
i
Contents
1
Short title ........................................................................................... 1
2
Commencement ................................................................................. 1
3
Schedules ........................................................................................... 2
Schedule 1--Amendments
3
Part 1--Employee entitlements
3
Corporations Act 2001
3
Part 2--Contribution orders
15
Corporations Act 2001
15
Part 3--Disqualification from managing corporations
19
Division 1--Main amendments
19
Corporations Act 2001
19
Division 2--Consequential amendments
23
Corporations (Aboriginal and Torres Strait Islander) Act 2006
23
Part 4--Transitional provisions
24
Corporations Act 2001
24
No. , 2018
Corporations Amendment (Strengthening Protections for Employee
Entitlements) Bill 2018
1
A Bill for an Act to amend the law relating to
1
protecting employee entitlements, and for related
2
purposes
3
The Parliament of Australia enacts:
4
1 Short title
5
This Act is the Corporations Amendment (Strengthening
6
Protections for Employee Entitlements) Act 2018.
7
2 Commencement
8
(1) Each provision of this Act specified in column 1 of the table
9
commences, or is taken to have commenced, in accordance with
10
column 2 of the table. Any other statement in column 2 has effect
11
according to its terms.
12
2
Corporations Amendment (Strengthening Protections for Employee
Entitlements) Bill 2018
No. , 2018
1
Commencement information
Column 1
Column 2
Column 3
Provisions
Commencement
Date/Details
1. The whole of
this Act
The day after this Act receives the Royal
Assent.
Note:
This table relates only to the provisions of this Act as originally
2
enacted. It will not be amended to deal with any later amendments of
3
this Act.
4
(2) Any information in column 3 of the table is not part of this Act.
5
Information may be inserted in this column, or information in it
6
may be edited, in any published version of this Act.
7
3 Schedules
8
Legislation that is specified in a Schedule to this Act is amended or
9
repealed as set out in the applicable items in the Schedule
10
concerned, and any other item in a Schedule to this Act has effect
11
according to its terms.
12
Amendments Schedule 1
Employee entitlements Part 1
No. , 2018
Corporations Amendment (Strengthening Protections for Employee
Entitlements) Bill 2018
3
Schedule 1--Amendments
1
Part 1--Employee entitlements
2
Corporations Act 2001
3
1 Section 9 (definition of linked)
4
Omit "section 596AB are linked if they are linked under
5
subsection 596AB(4)", substitute "subsection 596AC(1), (2), (3) or (4)
6
are linked if they are linked under subsection 596AC(10)".
7
2 Paragraph 588N(b)
8
Omit "section 596AC in relation to a contravention of section 596AB",
9
substitute "section 596ACA in relation to a contravention of
10
subsection 596AC(1), (2), (3) or (4)".
11
3 Section 596AA (heading)
12
Repeal the heading, substitute:
13
596AA Objects and coverage of this Part
14
4 Subsection 596AA(1)
15
Repeal the subsection, substitute:
16
Objects
17
(1) The objects of this Part are to:
18
(a) deter avoidance of the payment of the entitlements of
19
employees; and
20
(b) protect the entitlements of a company's employees from
21
agreements, arrangements and transactions that avoid or
22
prevent the recovery of those entitlements, or significantly
23
reduce the amount of those entitlements that can be
24
recovered, in the winding up of the company.
25
Schedule 1 Amendments
Part 1 Employee entitlements
4
Corporations Amendment (Strengthening Protections for Employee
Entitlements) Bill 2018
No. , 2018
5 Subsection 596AA(2)
1
Omit "An entitlement of an employee need not be owed to the
2
employee. It might, for example, be an amount owed to the employee's
3
dependants or a superannuation contribution payable to a fund in
4
respect of services rendered by the employee.".
5
6 After subsection 596AA(2)
6
Insert:
7
(2A) For the purposes of subsection (2), an entitlement of an employee
8
need not be owed to the employee. It might, for example, be:
9
(a) an amount owed to the employee's dependants; or
10
(b) a superannuation contribution payable to a fund in respect of
11
services rendered by the employee; or
12
(c) a right in relation to an entitlement that becomes a right of
13
the Commonwealth under paragraph 31(1)(b) of the Fair
14
Entitlements Guarantee Act 2012; or
15
(d) an entitlement in relation to which an entity other than the
16
employee has a right of subrogation.
17
7 Section 596AB (heading)
18
Repeal the heading, substitute:
19
596AB Relevant agreements or transactions that avoid employee
20
entitlements--offences
21
8 Subsections 596AB(1) and (2)
22
Repeal the subsections, substitute:
23
Offences of entering into relevant agreement or transaction
24
(1) A person contravenes this subsection if the person enters into a
25
relevant agreement or a transaction with the intention of, or with
26
intentions that include the intention of:
27
(a) avoiding or preventing the recovery of the entitlements of
28
employees of a company; or
29
(b) significantly reducing the amount of the entitlements of
30
employees of a company that can be recovered.
31
Amendments Schedule 1
Employee entitlements Part 1
No. , 2018
Corporations Amendment (Strengthening Protections for Employee
Entitlements) Bill 2018
5
Note:
A contravention of this subsection is an offence (see
1
subsection 1311(1)).
2
(1A) A person contravenes this subsection if:
3
(a) the person enters into a relevant agreement or a transaction;
4
and
5
(b) the person is reckless as to whether the relevant agreement or
6
the transaction will:
7
(i) avoid or prevent the recovery of the entitlements of
8
employees of a company; or
9
(ii) significantly reduce the amount of the entitlements of
10
employees of a company that can be recovered.
11
Note:
A contravention of this subsection is an offence (see
12
subsection 1311(1)).
13
Offences of causing company to enter into relevant agreement or
14
transaction
15
(1B) A person contravenes this subsection if:
16
(a) the person is an officer of a company; and
17
(b) the person causes the company to enter into a relevant
18
agreement or a transaction; and
19
(c) the person does so with the intention of, or with intentions
20
that include the intention of:
21
(i) avoiding or preventing the recovery of the entitlements
22
of employees of the company; or
23
(ii) significantly reducing the amount of the entitlements of
24
employees of the company that can be recovered.
25
Note:
A contravention of this subsection is an offence (see
26
subsection 1311(1)).
27
(1C) A person contravenes this subsection if:
28
(a) the person is an officer of a company; and
29
(b) the person causes the company to enter into a relevant
30
agreement or a transaction; and
31
(c) the person is reckless as to whether the relevant agreement or
32
the transaction will:
33
(i) avoid or prevent the recovery of the entitlements of
34
employees of the company; or
35
Schedule 1 Amendments
Part 1 Employee entitlements
6
Corporations Amendment (Strengthening Protections for Employee
Entitlements) Bill 2018
No. , 2018
(ii) significantly reduce the amount of the entitlements of
1
employees of the company that can be recovered.
2
Note:
A contravention of this subsection is an offence (see
3
subsection 1311(1)).
4
Application of offence provisions
5
(2) Subsections (1) and (1A) apply even if the company is not a party
6
to the relevant agreement or the transaction.
7
(2A) Subsections (1), (1A), (1B) and (1C) apply even if:
8
(a) the relevant agreement or the transaction is approved by a
9
court; or
10
(b) the relevant agreement or the transaction has not had the
11
effect or effects mentioned in paragraph (1)(a) or (b),
12
(1A)(b), (1B)(c) or (1C)(c), as the case may be; or
13
(c) despite the relevant agreement or the transaction, the
14
entitlements of the employees of the company are recovered.
15
(2B) However, subsections (1), (1A), (1B) and (1C) do not apply if the
16
relevant agreement or the transaction is, or is entered into under:
17
(a) a compromise or arrangement between the company and its
18
creditors or a class of its creditors, or its members or a class
19
of its members, that is approved by a Court under
20
section 411; or
21
(b) a deed of company arrangement executed by the company.
22
Note:
A defendant bears an evidential burden in relation to the matters in
23
this subsection (see subsection 13.3(3) of the Criminal Code).
24
(2C) Subsections (1A) and (1C) do not apply if a liquidator or
25
provisional liquidator of the company causes the relevant
26
agreement or the transaction to be entered into in the course of
27
winding up the company.
28
Note:
A defendant bears an evidential burden in relation to the matters in
29
this subsection (see subsection 13.3(3) of the Criminal Code).
30
Definitions
31
9 At the end of subsection 596AB(3)
32
Add:
33
Amendments Schedule 1
Employee entitlements Part 1
No. , 2018
Corporations Amendment (Strengthening Protections for Employee
Entitlements) Bill 2018
7
Note:
A relevant agreement is an agreement, arrangement or understanding
1
(see the definition of relevant agreement in section 9).
2
10 Subsection 596AB(4)
3
Repeal the subsection.
4
11 Section 596AC
5
Repeal the section, substitute:
6
596AC Relevant agreements or transactions that avoid employee
7
entitlements--civil contraventions
8
Entering into relevant agreement or transaction
9
(1) A person contravenes this subsection if:
10
(a) the person enters into a relevant agreement or a transaction
11
(within the meaning of subsection 596AB(3)); and
12
(b) the person knows, or a reasonable person in the position of
13
the person would know, that the relevant agreement or the
14
transaction is likely to:
15
(i) avoid or prevent the recovery of the entitlements of
16
employees of a company; or
17
(ii) significantly reduce the amount of the entitlements of
18
employees of a company that can be recovered.
19
Note:
This subsection is a civil penalty provision (see section 1317E).
20
(2) A person who is involved in a contravention of subsection (1)
21
contravenes this subsection.
22
Note 1:
Section 79 defines involved.
23
Note 2:
This subsection is a civil penalty provision (see section 1317E).
24
Causing company to enter into relevant agreement or transaction
25
(3) A person contravenes this subsection if:
26
(a) the person is an officer of a company; and
27
(b) the person causes the company to enter into a relevant
28
agreement or a transaction (within the meaning of
29
subsection 596AB(3)); and
30
Schedule 1 Amendments
Part 1 Employee entitlements
8
Corporations Amendment (Strengthening Protections for Employee
Entitlements) Bill 2018
No. , 2018
(c) the person knows, or a reasonable person in the position of
1
the person would know, that the relevant agreement or the
2
transaction is likely to:
3
(i) avoid or prevent the recovery of the entitlements of
4
employees of the company; or
5
(ii) significantly reduce the amount of the entitlements of
6
employees of the company that can be recovered.
7
Note:
This subsection is a civil penalty provision (see section 1317E).
8
(4) A person who is involved in a contravention of subsection (3)
9
contravenes this subsection.
10
Note 1:
Section 79 defines involved.
11
Note 2:
This subsection is a civil penalty provision (see section 1317E).
12
Application of contravention provisions
13
(5) Subsections (1) and (2) apply even if the company is not a party to
14
the relevant agreement or the transaction.
15
(6) Subsections (1), (2), (3) and (4) apply even if:
16
(a) the relevant agreement or the transaction is approved by a
17
court; or
18
(b) the relevant agreement or the transaction has not had the
19
effect or effects mentioned in paragraph (1)(b) or (3)(c), as
20
the case may be; or
21
(c) despite the relevant agreement or the transaction, the
22
entitlements of the employees of the company are recovered.
23
(7) However, subsections (1), (2), (3) and (4) do not apply if:
24
(a) the relevant agreement or the transaction is, or is entered into
25
under:
26
(i) a compromise or arrangement between the company and
27
its creditors or a class of its creditors, or its members or
28
a class of its members, that is approved by a Court
29
under section 411; or
30
(ii) a deed of company arrangement executed by the
31
company; or
32
Amendments Schedule 1
Employee entitlements Part 1
No. , 2018
Corporations Amendment (Strengthening Protections for Employee
Entitlements) Bill 2018
9
(b) a liquidator or provisional liquidator of the company causes
1
the relevant agreement or the transaction to be entered into in
2
the course of winding up the company.
3
(8) A person who wishes to rely on subsection (7) in a proceeding for,
4
or relating to, a contravention of subsection (1), (2), (3) or (4) bears
5
an evidential burden in relation to that matter.
6
Proceedings may be begun only after liquidator appointed
7
(9) Proceedings under section 1317E for a declaration of a
8
contravention of this section may only be begun after a liquidator
9
has been appointed to the company.
10
Linked debts
11
(10) If a person contravenes this section by incurring a debt (within the
12
meaning of section 588G), the incurring of the debt and the
13
contravention are linked for the purposes of this Act.
14
Definitions
15
(11) In this section:
16
evidential burden, in relation to a matter, means the burden of
17
adducing or pointing to evidence that suggests a reasonable
18
possibility that the matter exists or does not exist.
19
596ACA Person who contravenes section 596AC liable to
20
compensate for loss
21
(1) A person is liable to pay compensation under subsection (3) or (4)
22
if:
23
(a) the person has contravened subsection 596AC(1), (2), (3) or
24
(4) in relation to the entitlements of employees of a company;
25
and
26
(b) employees of the company have suffered loss or damage
27
because of the relevant agreement or the transaction referred
28
to in subsection 596AC(1) or (3), or because of action taken
29
to give effect to the relevant agreement or the transaction;
30
and
31
(c) a liquidator has been appointed to the company.
32
Schedule 1 Amendments
Part 1 Employee entitlements
10
Corporations Amendment (Strengthening Protections for Employee
Entitlements) Bill 2018
No. , 2018
(2) The person may be liable whether or not:
1
(a) a Court has made a declaration of contravention or a
2
pecuniary penalty order under Part 9.4B that applies to the
3
person in relation to the contravention; or
4
(b) the person has been convicted of an offence based on
5
section 596AB in relation to the matters giving rise to the
6
contravention; or
7
(c) the company has been wound up.
8
(3) The company's liquidator may recover from the person, as a debt
9
due to the company, an amount equal to the loss or damage
10
referred to in paragraph (1)(b).
11
(4) An employee who suffers loss or damage referred to in
12
paragraph (1)(b) may, as provided in section 596AF (but not
13
otherwise), recover from the person, as a debt due to the employee,
14
an amount equal to the loss or damage.
15
(5) An amount recovered under subsection (4) is to be taken into
16
account in working out the amount (if any) for which the employee
17
may prove in the liquidation of the company.
18
(6) Proceedings under this section may only be begun within 6 years
19
after the company begins to be wound up.
20
12 Section 596AD
21
Omit "section 596AC in relation to a contravention of section 596AB",
22
substitute "section 596ACA in relation to a contravention of
23
subsection 596AC(1), (2), (3) or (4)".
24
13 At the end of section 596AD
25
Add:
26
; and (c) proceedings under section 588ZA in relation to the
27
entitlements to which the contravention relates; and
28
(d) proceedings under section 1317H in relation to the
29
contravention.
30
14 Section 596AE (heading)
31
Repeal the heading, substitute:
32
Amendments Schedule 1
Employee entitlements Part 1
No. , 2018
Corporations Amendment (Strengthening Protections for Employee
Entitlements) Bill 2018
11
596AE Effect of section 596ACA
1
15 Section 596AE
2
Omit "Section 596AC", substitute "Section 596ACA".
3
16 Sections 596AF to 596AI
4
Repeal the sections, substitute:
5
596AF Proceedings for compensation
6
(1) Subject to section 596AG and to subsection (2) of this section, any
7
of the following may begin proceedings under section 596ACA for
8
compensation to be paid under subsection 596ACA(3) or (4) in
9
relation to a contravention of subsection 596AC(1), (2), (3) or (4)
10
that relates to a company:
11
(a) the Commissioner of Taxation;
12
(b) the Fair Work Ombudsman;
13
(c) the Secretary of the Department administered by the Minister
14
who administers the Fair Entitlements Guarantee Act 2012;
15
(d) an employee of the company.
16
This subsection does not prevent the company's liquidator
17
beginning proceedings under subsection 596ACA(3).
18
If liquidator appointed, proceedings require consent or leave
19
(2) If a liquidator is appointed to the company, proceedings may only
20
be begun as described in subsection (1):
21
(a) with the written consent of the liquidator; or
22
(b) with the leave of the Court.
23
(3) The Court may give leave under paragraph (2)(b) only if:
24
(a) the person seeking to bring the proceedings (the applicant)
25
has given a written notice to the liquidator asking the
26
liquidator to give consent under paragraph (2)(a); and
27
(b) either:
28
(i) the liquidator has given written notice to the applicant
29
refusing to give consent under paragraph (2)(a); or
30
(ii) more than 30 days have passed since the notice under
31
paragraph (a) of this subsection was given; and
32
Schedule 1 Amendments
Part 1 Employee entitlements
12
Corporations Amendment (Strengthening Protections for Employee
Entitlements) Bill 2018
No. , 2018
(c) the Court is satisfied that it is appropriate to give leave,
1
having regard to the following matters:
2
(i) whether it is likely that the liquidator will begin
3
proceedings under section 596ACA in relation to the
4
compensation;
5
(ii) whether the liquidator has applied under section 588FF
6
in relation to a transaction that constituted, or was part
7
of, the contravention;
8
(iii) whether the liquidator has intervened in an application
9
for a civil penalty order against a person in relation to a
10
contravention of section 588G in relation to the
11
incurring of a debt that is linked to the contravention of
12
subsection 596AC(1), (2), (3) or (4) referred to in
13
subsection (1) of this section;
14
(iv) whether the liquidator has begun proceedings under
15
section 588M in relation to the incurring of a debt that is
16
linked to the contravention of subsection 596AC(1), (2),
17
(3) or (4) referred to in subsection (1) of this section;
18
(v) any other matter that the Court considers relevant.
19
596AG Events preventing proceedings
20
(1) Proceedings cannot be begun as described in subsection 596AF(1)
21
in relation to a company and a contravention of
22
subsection 596AC(1), (2), (3) or (4) if the company's liquidator has
23
begun proceedings under section 596ACA in relation to the
24
contravention.
25
(2) An employee of a company that is being wound up cannot begin
26
proceedings under section 596ACA in relation to a contravention
27
of subsection 596AC(1), (2), (3) or (4) if a person mentioned in
28
paragraph 596AF(1)(a), (b) or (c) has begun proceedings under
29
section 596ACA in relation to the contravention.
30
596AH Joining parties to proceedings
31
(1) If a company's liquidator has begun proceedings under
32
section 596ACA, any of the following may apply to the Court for
33
leave to be joined as a party to the proceedings:
34
(a) the Commissioner of Taxation;
35
Amendments Schedule 1
Employee entitlements Part 1
No. , 2018
Corporations Amendment (Strengthening Protections for Employee
Entitlements) Bill 2018
13
(b) the Fair Work Ombudsman;
1
(c) the Secretary of the Department administered by the Minister
2
who administers the Fair Entitlements Guarantee Act 2012;
3
(d) an employee of the company.
4
(2) If a person mentioned in paragraph (1)(a), (b) or (c) has begun
5
proceedings under section 596ACA, any of the following may
6
apply to the Court for leave to be joined as a party to the
7
proceedings:
8
(a) another person mentioned in paragraph (1)(a), (b) or (c);
9
(b) an employee of the company to which the proceedings relate;
10
(c) the company's liquidator.
11
17 Subsection 1317E(1) (before table item 7)
12
Insert:
13
14
6C
subsections 596AC(1), (2), (3) and
(4)
avoiding employee entitlements
15
18 Schedule 3 (table item 145)
16
Repeal the item, substitute:
17
18
145
Subsections 596AB(1), (1A), (1B)
and (1C)
In the case of an individual,
imprisonment for 10 years or a fine
of the greater of the following:
(a) 4,500 penalty units;
(b) if the court can determine the
total value of the benefits that
have been obtained by one or
more persons and are reasonably
attributable to the commission of
the offence--3 times that total
value;
or both.
In the case of a body corporate, a
fine of the greatest of the following:
(a) 45,000 penalty units;
Schedule 1 Amendments
Part 1 Employee entitlements
14
Corporations Amendment (Strengthening Protections for Employee
Entitlements) Bill 2018
No. , 2018
(b) if the court can determine the
total value of the benefits that
have been obtained by one or
more persons and are reasonably
attributable to the commission of
the offence--3 times that total
value;
(c) 10% of the body corporate's
annual turnover (as defined in
section 761A) during the
12-month period ending at the
end of the month in which the
body corporate committed, or
began committing, the offence.
Amendments Schedule 1
Contribution orders Part 2
No. , 2018
Corporations Amendment (Strengthening Protections for Employee
Entitlements) Bill 2018
15
Part 2--Contribution orders
1
Corporations Act 2001
2
19 Section 9
3
Insert:
4
employee entitlements contribution order has the meaning given
5
by subsection 588ZA(1).
6
20 At the end of Part 5.7B
7
Add:
8
Division 8--Employee entitlements contribution orders
9
588ZA Employee entitlements contribution orders
10
Making of employee entitlements contribution order
11
(1) The Court may make an order under subsection (2) (an employee
12
entitlements contribution order) in relation to an entity (the
13
contributing entity) if the Court is satisfied that:
14
(a) a company (the insolvent company) is being wound up; and
15
(b) an amount (the unpaid entitlements amount) of the
16
entitlements of one or more employees (within the meaning
17
of Part 5.8A) of the insolvent company that are protected
18
under Part 5.8A has not been paid; and
19
(c) the contributing entity is a member of the same contribution
20
order group (see subsection (6)) as the insolvent company;
21
and
22
(d) the contributing entity has benefited, directly or indirectly,
23
from work done by those employees; and
24
(e) that benefit exceeds the benefit that would be reasonable in
25
the circumstances if the insolvent company and the
26
contributing entity were dealing at arm's length; and
27
(f) it is just and equitable to make the order.
28
Schedule 1 Amendments
Part 2 Contribution orders
16
Corporations Amendment (Strengthening Protections for Employee
Entitlements) Bill 2018
No. , 2018
Note 1:
For the people who may apply to the Court for an employee
1
entitlements contribution order, see section 588ZB.
2
Note 2:
A reference in Part 5.8A to an employee of a company is a reference
3
to a current or former employee, and includes a reference to another
4
person to whom an entitlement of an employee is owed (see
5
section 596AA).
6
(2) For the purposes of subsection (1), the Court may order the
7
contributing entity to pay to the liquidator of the insolvent
8
company an amount that:
9
(a) reflects the value of the excess referred to in
10
paragraph (1)(e); and
11
(b) does not, together with any other payments required to be
12
made in respect of the unpaid entitlements amount by the
13
order, exceed the unpaid entitlements amount.
14
(3) The payment of an amount in accordance with an employee
15
entitlements contribution order is not to be taken to be an advance
16
of money for the purposes of section 560.
17
(4) In determining whether it is just and equitable to make an
18
employee entitlements contribution order, the Court may have
19
regard to the following matters:
20
(a) the size of the excess referred to in paragraph (1)(e);
21
(b) the nature of the relationship between the contributing entity
22
and the insolvent company;
23
(c) any efforts made by the contributing entity, or officers of the
24
contributing entity, and officers of the insolvent company to
25
pay or to provide for the payment of the unpaid entitlements
26
amount;
27
(d) if the contributing entity is solvent--whether the order is
28
likely to result in the contributing entity becoming insolvent;
29
(e) the extent (if any) to which the order is likely to result in the
30
contributing entity becoming unable to pay the entitlements
31
of its employees or make distributions to creditors;
32
(f) any other matters that the Court considers appropriate.
33
(5) If the Court makes an employee entitlements contribution order,
34
the Court may do the following:
35
(a) if the contributing entity is a company--order that the
36
obligation to pay an amount under the order has the priority
37
Amendments Schedule 1
Contribution orders Part 2
No. , 2018
Corporations Amendment (Strengthening Protections for Employee
Entitlements) Bill 2018
17
of a debt or claim covered by any of paragraph 556(1)(e), (f),
1
(g) or (h) in the winding up of the contributing entity
2
(whether or not the contributing entity is being wound up
3
when the order is made);
4
(b) make any other orders, and give any directions, that the Court
5
considers appropriate for the purposes of giving effect to the
6
employee entitlements contribution order.
7
Contribution order group
8
(6) For the purposes of subsection (1), 2 entities are members of the
9
same contribution order group if:
10
(a) one of the entities is, or has been, a related body corporate of
11
the other entity; or
12
(b) one of the entities is, or has been, a related body corporate of
13
a body corporate that is, or has been, a related body corporate
14
of the other entity; or
15
(c) one of the entities is, or has been, controlled by the other
16
entity or a related body corporate of the other entity; or
17
(d) both of the entities represent, or have represented, to the
18
public that they are related to one another; or
19
(e) both entities are, or have been, part of the same consolidated
20
entity; or
21
(f) both entities are, or have been, part of a collection of entities
22
that, as a matter of economic and commercial substance,
23
functions or functioned as a single entity.
24
588ZB Who may apply for an employee entitlements contribution
25
order
26
(1) An application to the Court for an employee entitlements
27
contribution order may only be made by:
28
(a) the liquidator of the insolvent company referred to in
29
paragraph 588ZA(1)(a) (the insolvent company); or
30
(b) the Commissioner of Taxation; or
31
(c) the Fair Work Ombudsman; or
32
(d) the Secretary of the Department administered by the Minister
33
who administers the Fair Entitlements Guarantee Act 2012.
34
Schedule 1 Amendments
Part 2 Contribution orders
18
Corporations Amendment (Strengthening Protections for Employee
Entitlements) Bill 2018
No. , 2018
(2) If a liquidator is appointed to the insolvent company, a person
1
mentioned in paragraph (1)(b), (c) or (d) may make the application
2
only:
3
(a) if the liquidator has given written consent to the applicant for
4
the application to be made; or
5
(b) with the leave of the Court.
6
(3) The Court may give leave under paragraph (2)(b) only if:
7
(a) the applicant has given a written notice to the liquidator
8
asking the liquidator to give consent under paragraph (2)(a);
9
and
10
(b) either:
11
(i) the liquidator has given written notice to the applicant
12
refusing to give consent under paragraph (2)(a); or
13
(ii) more than 30 days have passed since the notice under
14
paragraph (a) of this subsection was given; and
15
(c) the Court is satisfied that it is appropriate to give leave,
16
having regard to the following matters:
17
(i) whether it is likely that the liquidator will make an
18
application for an employee entitlements contribution
19
order in relation to the insolvent company;
20
(ii) any other matter that the Court considers relevant.
21
When proceedings may be begun
22
(4) An application for an employee entitlements contribution order
23
may only be made within 6 years after the beginning of the
24
winding up of the insolvent company.
25
Amendments Schedule 1
Disqualification from managing corporations Part 3
No. , 2018
Corporations Amendment (Strengthening Protections for Employee
Entitlements) Bill 2018
19
Part 3--Disqualification from managing corporations
1
Division 1
--Main amendments
2
Corporations Act 2001
3
21 Subsection 201B(2)
4
Omit "section 206F", substitute "section 206GAB".
5
22 Section 203B
6
Omit "sections 206F", substitute "sections 206GAB".
7
23 Subsection 204B(2)
8
Omit "section 206F", substitute "section 206GAB".
9
24 Section 204G
10
Omit "sections 206F", substitute "sections 206GAB".
11
25 Subsections 206A(1B) and (2)
12
Omit "section 206F", substitute "section 206GAB".
13
26 After section 206EAA
14
Insert:
15
206EAB Court power of disqualification--unrecovered payments
16
under employee entitlements scheme
17
(1) On application by ASIC, the Court may disqualify a person from
18
managing corporations for a period that the Court considers
19
appropriate if:
20
(a) subsection (2) applies to the person in relation to 2 or more
21
corporations; and
22
(b) the Court is satisfied that the disqualification is justified.
23
(2) This subsection applies to the person in relation to a corporation if:
24
(a) within the last 7 years:
25
(i) the person has been an officer of the corporation; and
26
Schedule 1 Amendments
Part 3 Disqualification from managing corporations
20
Corporations Amendment (Strengthening Protections for Employee
Entitlements) Bill 2018
No. , 2018
(ii) while the person was an officer, or within 12 months
1
after the person ceased to be an officer, the corporation
2
began to be wound up; and
3
(iii) money was advanced for the purposes of paying the
4
entitlements of employees of the corporation under the
5
Fair Entitlements Guarantee Act 2012; and
6
(b) the Commonwealth has received a minimal return, or no
7
return, on the advance (whether or not the corporation is still
8
being wound up, or has been wound up); and
9
(c) the Court is satisfied that the Commonwealth is unlikely to
10
receive more than a minimal return on the advance; and
11
(d) either of the following occurred during the 7-year period
12
mentioned in paragraph (a):
13
(i) the corporation contravened this Act or the
14
Corporations (Aboriginal and Torres Strait Islander)
15
Act 2006 while the person was an officer of the
16
corporation, and the person failed to take reasonable
17
steps to prevent the contravention;
18
(ii) the person contravened this Act or the Corporations
19
(Aboriginal and Torres Strait Islander) Act 2006 while
20
the person was an officer of the corporation.
21
(3) For the purposes of paragraphs (2)(b) and (c), the Commonwealth
22
has received a minimal return on an advance under the Fair
23
Entitlements Guarantee Act 2012 if the amount of the advance
24
recovered by the Commonwealth is 10 cents in the dollar or less.
25
Note:
For recovery of advances paid under the Fair Entitlements Guarantee
26
Act 2012, see Part 5 of that Act.
27
(4) In determining whether the disqualification is justified, the Court
28
may have regard to:
29
(a) the person's conduct in relation to the management, business
30
or property of any corporation; and
31
(b) any other matters that the Court considers appropriate.
32
(5) To avoid doubt, the references in paragraph (1)(a) and
33
subsections (2) and (4) to a corporation include references to an
34
Aboriginal and Torres Strait Islander corporation.
35
Amendments Schedule 1
Disqualification from managing corporations Part 3
No. , 2018
Corporations Amendment (Strengthening Protections for Employee
Entitlements) Bill 2018
21
27 Subsection 206F(5)
1
Repeal the subsection.
2
28 Before section 206G
3
Insert:
4
206GAA ASIC's power of disqualification--unrecovered payments
5
under employee entitlements scheme
6
(1) ASIC may disqualify a person from managing corporations for up
7
to 5 years if:
8
(a) subsection (2) applies to the person in relation to 2 or more
9
corporations; and
10
(b) ASIC has given the person:
11
(i) a notice in the prescribed form requiring them to
12
demonstrate why they should not be disqualified; and
13
(ii) an opportunity to be heard on the question; and
14
(c) ASIC is satisfied that the disqualification is justified.
15
(2) This subsection applies to the person in relation to a corporation if:
16
(a) within 7 years immediately before ASIC gives the notice
17
under subparagraph (1)(b)(i):
18
(i) the person has been an officer of the corporation; and
19
(ii) while the person was an officer, or within 12 months
20
after the person ceased to be an officer, the corporation
21
began to be wound up; and
22
(iii) money was advanced for the purposes of paying the
23
entitlements of employees of the corporation under the
24
Fair Entitlements Guarantee Act 2012; and
25
(b) the Commonwealth has received a minimal return, or no
26
return, on the advance (whether or not the corporation is still
27
being wound up, or has been wound up); and
28
(c) ASIC has reason to believe that the Commonwealth is
29
unlikely to receive more than a minimal return on the
30
advance; and
31
(d) ASIC has reason to believe that either of the following
32
occurred during the 7-year period mentioned in
33
paragraph (a):
34
Schedule 1 Amendments
Part 3 Disqualification from managing corporations
22
Corporations Amendment (Strengthening Protections for Employee
Entitlements) Bill 2018
No. , 2018
(i) the corporation contravened this Act or the
1
Corporations (Aboriginal and Torres Strait Islander)
2
Act 2006 while the person was an officer of the
3
corporation, and the person failed to take reasonable
4
steps to prevent the contravention;
5
(ii) the person contravened this Act or the Corporations
6
(Aboriginal and Torres Strait Islander) Act 2006 while
7
the person was an officer of the corporation.
8
(3) For the purposes of paragraphs (2)(b) and (c), the Commonwealth
9
has received a minimal return on an advance under the Fair
10
Entitlements Guarantee Act 2012 if the amount of the advance
11
recovered by the Commonwealth is 10 cents in the dollar or less.
12
Note:
For recovery of advances paid under the Fair Entitlements Guarantee
13
Act 2012, see Part 5 of that Act.
14
(4) In determining whether the disqualification is justified, ASIC:
15
(a) must have regard to whether any of the corporations
16
mentioned in paragraph (1)(a) were related to one another;
17
and
18
(b) may have regard to:
19
(i) the person's conduct in relation to the management,
20
business or property of any corporation; and
21
(ii) whether the disqualification would be in the public
22
interest; and
23
(iii) any other matters that ASIC considers appropriate.
24
(5) To avoid doubt, the references in paragraph (1)(a) and
25
subsections (2) and (4) to a corporation include references to an
26
Aboriginal and Torres Strait Islander corporation.
27
Notice of disqualification
28
(6) If ASIC disqualifies a person from managing corporations under
29
this section, ASIC must serve a notice on the person advising them
30
of the disqualification. The notice must be in the prescribed form.
31
Start of disqualification
32
(7) The disqualification takes effect from the time when a notice
33
referred to in subsection (6) is served on the person.
34
Amendments Schedule 1
Disqualification from managing corporations Part 3
No. , 2018
Corporations Amendment (Strengthening Protections for Employee
Entitlements) Bill 2018
23
206GAB ASIC power to grant leave
1
ASIC may give a person who it has disqualified from managing
2
corporations under this Part written permission to manage a
3
particular corporation or corporations. The permission may be
4
expressed to be subject to conditions and exceptions determined by
5
ASIC.
6
29 Paragraph 1274AA(1)(a)
7
Omit "206EA, 206EB or 206F", substitute "206EAB, 206EA, 206EB,
8
206F or 206GAA".
9
30 After paragraph 1274AA(2)(ab)
10
Insert:
11
(aba) every court order referred to in section 206EAB; and
12
31 Paragraph 1274AA(2)(c)
13
Repeal the paragraph, substitute:
14
(c) every notice that was served under subsection 206GAA(6);
15
and
16
(ca) each permission given under section 206GAB; and
17
Division 2
--Consequential amendments
18
Corporations (Aboriginal and Torres Strait Islander) Act
19
2006
20
32 Paragraph 279-35(2)(b)
21
After "section 206F", insert "or 206GAA".
22
Schedule 1 Amendments
Part 4 Transitional provisions
24
Corporations Amendment (Strengthening Protections for Employee
Entitlements) Bill 2018
No. , 2018
Part 4--Transitional provisions
1
Corporations Act 2001
2
33 In the appropriate position in Chapter 10
3
Insert:
4
Part 10.34--Transitional provisions relating to the
5
Corporations Amendment (Strengthening
6
Protections for Employee Entitlements) Act
7
2018
8
9
1647 Application--protection of employee entitlements
10
The amendments made by Part 1 of Schedule 1 to the Corporations
11
Amendment (Strengthening Protections for Employee Entitlements)
12
Act 2018 apply in relation to a relevant agreement or a transaction
13
that is entered into at or after the commencement of that Part.
14
1648 Application--contribution orders
15
The amendments made by Part 2 of Schedule 1 to the Corporations
16
Amendment (Strengthening Protections for Employee Entitlements)
17
Act 2018 apply in relation to the winding up of a company that
18
begins at or after the commencement of that Part.
19
1649 Application--director disqualification
20
(1) The period of 7 years referred to in paragraphs 206EAB(2)(a) and
21
206GAA(2)(a) may include any period that is not more than 5
22
years before the day (the commencement day) that Part 3 of
23
Schedule 1 to the Corporations Amendment (Strengthening
24
Protections for Employee Entitlements) Act 2018 commences
25
(subject to the time limit of 7 years in those paragraphs).
26
Amendments Schedule 1
Transitional provisions Part 4
No. , 2018
Corporations Amendment (Strengthening Protections for Employee
Entitlements) Bill 2018
25
(2) However, a person may only be disqualified from managing
1
corporations under section 206EAB or 206GAA if at least one of
2
the contraventions referred to in paragraph 206EAB(2)(d) or
3
206GAA(2)(d), as the case may be, occurs on or after the
4
commencement day.
5
(3) A permission given under subsection 206F(5) that was in force
6
immediately before the commencement day continues in force (and
7
may be dealt with) as if it had been given under section 206GAB
8
as inserted by Part 3 of Schedule 1 to the Corporations Amendment
9
(Strengthening Protections for Employee Entitlements) Act 2018.
10