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This is a Bill, not an Act. For current law, see the Acts databases.
1998-1999-2000
The Parliament
of the
Commonwealth of
Australia
HOUSE OF
REPRESENTATIVES
Presented and read a first
time
Corporations
Law Amendment (Employee Entitlements) Bill
2000
No. ,
2000
(Treasury)
A Bill
for an Act to amend the Corporations Law, and for related
purposes
ISBN: 06424 28506
Contents
Corporations
Law 3
A Bill for an Act to amend the Corporations Law, and for
related purposes
The Parliament of Australia enacts:
This Act may be cited as the Corporations Law Amendment (Employee
Entitlements) Act 2000.
This Act commences on the day on which it receives the Royal
Assent.
The Corporations Law set out in section 82 of the Corporations Act
1989 is amended as set out in Schedule 1, and any other item in a Schedule
to this Act has effect according to its terms.
1 Section 9
Insert:
entitlements of an employee of a company has the meaning
given by subsections 596AA(2) and (3).
2 Section 9
Insert:
linked: the incurring of a debt and a contravention of
section 596AB are linked if they are linked under subsection
596AB(4).
3 Subsection 588G(1A) (after table item
6)
Insert:
|
7 |
entering into an uncommercial transaction (within the meaning of section
588FB) other than one that a court orders, or a prescribed agency directs, the
company to enter into |
when the transaction is entered into |
4 Section 588N
Repeal the section, substitute:
An amount recovered in proceedings under section 588M in relation to the
incurring of a debt by a company is to be taken into account in working out the
amount (if any) recoverable in:
(a) any other proceedings under that section in relation to the incurring
of the debt; and
(b) proceedings under section 596AC in relation to a contravention of
section 596AB that is linked to the incurring of the debt.
5 After Part 5.8
Insert:
Object
(1) The object of this Part is to protect the entitlements of a
company’s employees from agreements and transactions that are entered into
with the intention of defeating the recovery of those entitlements.
Employee entitlements
(2) The entitlements of an employee of a company that are
protected under this Part are:
(a) wages payable by the company for services rendered to the company by
the employee; and
(b) superannuation contributions (that is, contributions by the company to
a fund for the purposes of making provision for, or obtaining, superannuation
benefits for the employee, or for dependants of the employee) payable by the
company in respect of services rendered to the company by the employee;
and
(c) amounts due in respect of injury compensation in relation to the
employee; and
(d) amounts due under an industrial instrument in respect of the
employee’s leave of absence; and
(e) retrenchment payments for the employee (that is, amounts payable by
the company to the employee, under an industrial instrument, in respect of the
termination of the employee’s employment by the company).
An entitlement of an employee need not be owed to the employee. It might,
for example, be an amount owed to the employee’s dependants or a
superannuation contribution payable to a fund in respect of services rendered by
the employee.
(3) The entitlements of an excluded employee (within the meaning of
section 556) are protected under this Part only to the extent to which they have
priority under paragraph 556(1)(e), (f), (g) or (h).
Employees
(4) For the purposes of this Part, a person is an employee
of a company if the person is, or has been, an employee of the company (whether
remunerated by salary, wages, commission or otherwise).
(5) If an entitlement of an employee of a company is owed to a person
other than the employee, this Part applies to the entitlement as if a reference
to the employee included a reference to the person to whom the
entitlement is owed.
(1) A person must not enter into a relevant agreement or a transaction
with the intention of, or with intentions that include the intention
of:
(a) preventing the recovery of the entitlements of employees of a company;
or
(b) significantly reducing the amount of the entitlements of employees of
a company that can be recovered.
(2) Subsection (1) applies even if:
(a) the company is not a party to the agreement or transaction;
or
(b) the agreement or transaction is approved by a court.
(3) A reference in this section to a relevant agreement or a
transaction includes a reference to:
(a) a relevant agreement and a transaction; and
(b) a series or combination of:
(i) relevant agreements or transactions; or
(ii) relevant agreements; or
(iii) transactions.
(4) If a person contravenes this section by incurring a debt (within the
meaning of section 588G), the incurring of the debt and the contravention are
linked for the purposes of this Law.
(1) A person is liable to pay compensation under subsection (2) or (3)
if:
(a) the person contravenes section 596AB in relation to the entitlements
of employees of a company; and
(b) the company is being wound up; and
(c) the employees suffer loss or damage because of:
(i) the contravention; or
(ii) action taken to give effect to an agreement or transaction involved
in the contravention.
The person is liable whether or not the person has been convicted of an
offence in relation to the contravention.
(2) The company’s liquidator may recover from the person an amount
equal to the loss or damage as a debt due to the company.
Note: Because employee entitlements are priority payments
under paragraphs 556(1)(e) to (h), employees have priority to any compensation
recovered by the liquidator in proceedings brought under this
section.
(3) If an employee of the company has suffered loss or damage because
of:
(a) the contravention; or
(b) action taken to give effect to an agreement or transaction involved in
the contravention;
the employee may, as provided in section 596AF to 596AI (but not
otherwise), recover from the person, as a debt due to the employee, an amount
equal to the amount of the loss or damage. Any amount recovered by the employee
under this subsection is to be taken into account in working out the amount for
which the employee may prove in the liquidation of the company.
(4) Proceedings under this section may only be begun within 6 years after
the beginning of the winding up.
An amount recovered in proceedings under section 596AC in relation to a
contravention of section 596AB is to be taken into account in working out the
amount (if any) recoverable in:
(a) any other proceedings under that section in relation to the
contravention; and
(b) proceedings under section 588M in relation to the incurring of a debt
that is linked to the contravention.
Section 596AC:
(a) has effect in addition to, and not in derogation of, any rule of law
about the duty or liability of a person because of the person’s office or
employment in relation to a company; and
(b) does not prevent proceedings from being instituted in respect of a
breach of such a duty or in respect of such a liability.
(1) If a company is being wound up, an employee of the company may, with
the written consent of the company’s liquidator, begin proceedings under
section 596AC in relation to a contravention of section 596AB in relation to an
entitlement of the employee.
(2) Subsection (1) has effect despite section 596AH, but subject to
section 596AI.
An employee of a company that is being wound up may give the
company’s liquidator a written notice:
(a) stating that the employee intends to begin proceedings under section
596AC in relation to a contravention of section 596AB in relation to an
entitlement of the employee; and
(b) specifying the contravention of section 596AB and the entitlement to
which the proposed proceedings relate; and
(c) asking the liquidator to give the employee, within 3 months after
receiving the notice:
(i) a written consent to the employee beginning the proceedings;
or
(ii) a written statement of the reasons why the liquidator thinks that
proceedings under section 596AC in relation to the contravention should not be
begun.
The notice may be given only after the end of 6 months beginning when the
company begins to be wound up.
(1) This section applies if an employee of a company gives a notice under
section 596AG in relation to a contravention of section 569AB and to an
entitlement.
(2) The employee may begin proceedings in a court under section 596AC in
relation to the contravention and the entitlement if:
(a) as at the end of 3 months after the liquidator receives the notice, he
or she has not consented to the employee beginning such proceedings;
and
(b) on an application made after those 3 months, the court has given leave
for the proceedings to begin.
(3) If:
(a) during those 3 months, the liquidator gives to the employee a written
statement of the reasons why the liquidator thinks that such proceedings should
not be begun; and
(b) the employee applies for leave under paragraph (2)(b);
then:
(c) the employee must file the statement with the court when so applying;
and
(d) in determining the application, the court is to have regard to the
reasons set out in the statement.
(1) An employee of a company that is being wound up cannot begin
proceedings under section 596AC in relation to a contravention in relation to an
entitlement of the employee if:
(a) the company’s liquidator has applied under section 588FF in
relation to a transaction that constituted, or was part of, the contravention;
or
(b) the company’s liquidator has begun proceedings under section
596AC in relation to the contravention; or
(c) the company’s liquidator has begun proceedings under section
588M in relation to the incurring of the debt that is linked to the
contravention; or
(d) the company’s liquidator has intervened in an application for a
civil penalty order against a person in relation to a contravention of section
588G in relation to the incurring of the debt that is linked to the
contravention.
(2) Subsection (1) has effect despite sections 596AF and 596AH.
6 Schedule 3
Insert the following item in its appropriate place according to the order
in which it occurs in the Corporations Law:
|
Subsection 596AB(1) Penalty: 1,000 penalty units or imprisonment for 10 years, or
both. |