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This is a Bill, not an Act. For current law, see the Acts databases.
1998—1999—2000—2001
The
Parliament of the
Commonwealth of
Australia
HOUSE OF
REPRESENTATIVES
Presented and read a first
time
Employee Protection
(Employee
Entitlements Guarantee) Bill
2001
No. ,
2001
(Mrs Crosio)
A
Bill for an Act to provide for the establishment and administration of a scheme
to guarantee the payment of wages and other accrued liabilities owed to
employees in the event of employer insolvency, and for related
purposes.
ISBN: 0642 46653X
Contents
A Bill for an Act to provide for the establishment and
administration of a scheme to guarantee the payment of wages and other accrued
liabilities owed to employees in the event of employer insolvency, and for
related purposes.
The Parliament of Australia
enacts:
This
Act may be cited as the Employee Protection (Employee Entitlements) Act
2001.
(1) Subject to subsection (2), this Act commences on a day to be fixed by
Proclamation.
(2) If this Act does not commence under subsection (1) within the period
of 6 months beginning on the day on which this Act receives the Royal Assent, it
commences on the first day after the end of that period.
(1) The object of this Act is to protect the interests of employees in the
event of the insolvency of their employers.
(2) The principal means adopted for the achievement of this object are the
following:
(a) to establish a scheme of employee entitlements protection insurance;
and
(b) to require employers to insure their workforces under the scheme;
and
(c) to provide for the determination and enforcement of claims under the
scheme.
This Act does not apply to a contract of employment, or the parties to a
contract of employment, if:
(a) the employer is the Crown, or an agency, instrumentality or
representative of the Crown, in right of the Commonwealth, a State or a
Territory; or
(b) the employer is a body established under a law of the Commonwealth, a
State or a Territory conferring powers of local government on the
body.
This Act:
(a) extends to the Territory of Cocos (Keeling) Islands and the Territory
of Christmas Island; and
(b) has effect as if those Territories were part of Australia.
In this Act, unless the contrary intention appears:
approved insurer has the meaning given in section
16.
AWOTE amount for a quarter is the estimate of full time adult
average weekly ordinary time earnings for persons in Australia for the middle
month of the quarter published by the Australian Bureau of Statistics in
relation to the month.
Commissioner means the Insurance and Superannuation
Commissioner appointed under the Insurance and Superannuation Commissioner
Act 1987, or a person for the time being acting as Insurance and
Superannuation Commissioner under that Act.
contract of employment includes:
(a) a contract of apprenticeship;
(b) a contract under which a person works for commission;
(c) a contract that is wholly or principally for the labour of a
person;
(d) a contract under which a person performs or presents, or participates
in the performance or presentation of, any music, play, dance, entertainment,
sport, display or promotional activity or any similar activity involving the
exercise of intellectual, artistic, musical, physical or other personal
skills;
(e) a contract under which a person provides services in connection with
an activity referred to in paragraph (c);
(f) a contract under which a person performs services in, or in connection
with, the making of any film, tape or disc or of any television or radio
broadcast.
employer means a person who is liable to pay for the services
of another under a contract of employment and includes a former
employer.
employee means a person who provides services under a
contract of employment and includes a former employee.
(indexed) — if a sum of money is followed by the word
(indexed) that indicates that, if the AWOTE amount for the March
quarter of 1999 or a later year exceeds the AWOTE amount for the March quarter
of the previous year, the sum is to be adjusted (to the nearest dollar) as at
the following 1 July in proportion to the increase in the AWOTE amount.
insolvent has the meaning given by section 7.
insurer means:
(a) a person authorised by the Insurance Act 1973 or a law of a
State to carry on insurance business; or
(b) a body corporate that is, under the law of a State, responsible for
administering a scheme of workers compensation;
and includes the nominal insurer.
nominal insurer means the Commissioner in the Commissioner's
capacity as nominal insurer under this Act.
relevant conciliation procedures means procedures for the
settlement of claims under this Act by conciliation prescribed:
(a) in the case of a claim against an approved insurer—in the
agreement between the Commissioner and the insurer; or
(b) in the case of a claim against the nominal defendant—in the
regulations.
wages includes any payment made, or to be made, by an
employer to or for the benefit of an employee under a contract of
employment.
workforce means the total body of an employer's employees
(and, if an employer has only one employee, is a reference to that
employee).
year means calendar year.
(1) A person is insolvent if the person is unable to pay debts as they
fall due.
(2) Without limiting subsection (1), an individual is to be regarded as
insolvent if the individual:
(a) has become bankrupt; or
(b) has applied to take the benefit of a law for the benefit of bankrupt
or insolvent debtors; or
(c) has compounded with his or her creditors; or
(d) has assigned his or her remuneration for the benefit of
creditors.
(3) Without limiting subsection (1), a company is to be regarded as
insolvent if:
(a) the company has entered into a compromise or arrangement with its
creditors, or a class of its creditors, and the administration of the compromise
or arrangement has not yet ended; or
(b) a receiver, or a receiver and manager, of property of the company has
been appointed and is acting; or
(c) the company is under administration within the meaning of the
Corporations Law; or
(d) the company has executed a deed of company arrangement under Part 5.3
of the Corporations Law and the arrangement has not yet terminated; or
(e) the company is under official management; or
(f) the company is being wound up; or
(g) a provisional liquidator has been appointed for the company and has
not since been removed.
A policy of employee entitlements protection insurance is a policy of
insurance under which an approved insurer insures an employer's workforce
against loss resulting from the employer's insolvency.
An employee is entitled to be indemnified under a policy of employee
entitlements protection insurance for liabilities of the following kinds owed by
an insolvent employer to the employee:
(a) a liability for unpaid wages;
(b) a liability resulting from termination of employment without notice or
with insufficient notice;
(c) a liability for annual leave or long service leave;
(d) a liability for repayment of a premium or other amount paid by the
employee to the employer for training in a particular trade or
profession;
(e) a liability for payment relating to redundancy or termination payments
as provided for under the relevant employment’s instrument; and
(f) a liability of the employer outstanding in respect of the
employer’s superannuation obligations under legislation or under the
relevant employment instrument.
An employer (other than an exempt employer) must take out, and maintain,
a policy of employee entitlements protection insurance with an approved insurer
for the employer's workforce.
(1) An employer is exempt from the requirement to hold a policy of
employee entitlements protection insurance if: the employer's employees are not
employed for the purposes of a trade or business carried on by the
employer.
(2) An employer is exempt from the requirement to hold a policy of
employee entitlements protection insurance if the employer employs fewer than 20
employees.
(3) The Commissioner, if satisfied that other satisfactory arrangements
have been made by the employer, may issue a certificate in writing exempting an
employer from the obligation to hold employee entitlements protection insurance
in respect of all or any of the matters set out in section 9.
(4) Where, because of the provisions of subsection (3), the Commissioner
issues a certificate exempting an employer from the obligation to hold employee
entitlements protection insurance in respect of some of the matters set out in
section 9, the Commissioner may approve an arrangement under which the employer
pays a premium calculated in respect of protection for those matters set out in
section 9 and not covered in the certificate.
(5) The calculation and determination of any exemption or liability under
this section is to be on the basis of principles and requirements fixed by
regulation.
An employer must provide each employee with an information booklet in a
form approved by the Commissioner:
(a) explaining the employee's rights under the policy of employee
entitlements protection insurance maintained by the employer; and
(b) stating the name of the employer's insurer under the policy of
employee entitlements protection insurance.
Penalty: 50 penalty units.
An employer must, at the request of the employee, notify the employee of
the name and address of the insurer under the employer's policy of employee
entitlements protection insurance.
Penalty: 50 penalty units.
An insurer must, on issuing a policy of employee entitlements protection
insurance for an employer's workforce, give the Commissioner written
notice:
(a) stating the name and address of the employer; and
(b) containing the information required by the regulations.
Penalty: 50 penalty units.
(1) The Commissioner must, at the request of an employee, notify the
employee of the name and address of the insurer under the employer's policy of
employee entitlements protection insurance, as shown in the Commissioner's
records.
(2) If it appears from the Commissioner's records that the employer does
not have a current policy of employee entitlements protection insurance, the
Commissioner must notify the employee of that fact.
(1) An approved insurer is an insurer that enters into an
agreement with the Commissioner under which the insurer:
(a) undertakes to accept all applications for policies of employee
entitlements protection insurance at a rate of premium not exceeding limits
fixed by the Commissioner for the purposes of this section; and
(b) undertakes to contribute to the costs of the nominal insurer as
required by the Commissioner under this Part; and
(c) undertakes to make contributions under the bad risk
cross-subsidisation scheme as required by the Commissioner under this Part;
and
(d) is entitled to payments under the bad risk cross-subsidisation scheme
on the basis fixed in the scheme.
(2) The agreement with the approved insurer is also to provide for a
scheme for the conciliation of disputed claims under policies of employee
entitlements protection insurance.
(1) An insurer may withdraw from the agreement with the Commissioner by
giving written notice of withdrawal.
(2) The withdrawal takes effect, on a date fixed in the notice, which must
be at least one year after the date the notice is given.
(3) When the withdrawal takes effect, the insurer ceases to be an approved
insurer.
(4) After giving notice of withdrawal, an insurer must not issue any
further policies of employee entitlements protection insurance.
Penalty: 150 penalty units.
The Commissioner is to be regarded as the insurer under a policy of
employee entitlements protection insurance (the nominal insurer)
of employees of an employer who:
(a) is exempt from insurance under this Act; or
(b) fails to hold a policy of employee entitlements protection insurance
for the benefit of the employer's workforce as required under this
Act.
(1) An approved insurer must contribute towards the nominal insurer's
costs on a basis determined by the Commissioner.
(2) The basis of contribution must:
(a) be fair and equitable as between approved insurers; and
(b) ensure as far as practicable and subject to any adjustments that the
Commissioner considers fair and equitable in a particular case that the ratio
between:
(i) an insurer's premium income, or estimated premium income, from
policies of wage protection insurance; and
(ii) the insurer's contributions to the nominal insurer's costs;
is approximately the same for each approved insurer.
(1) The Commissioner may establish a scheme (the bad risk
cross-subsidisation scheme) under which the costs of insuring against bad
risks are fairly apportioned between all approved insurers.
(2) An insurer is taken to have insured against a bad risk if:
(a) the employer becomes insolvent within 1 year after taking out a policy
of employee entitlements protection insurance; or
(b) the risk of a claim under a policy of employee entitlements protection
insurance is classified by the Commissioner as a bad risk under criteria
determined by the Commissioner.
(1) An approved insurer must make contributions for the purposes of the
bad risk cross-subsidisation scheme on a basis determined by the
Commissioner.
(2) The basis of contribution must:
(a) be fair and equitable as between approved insurers; and
(b) must ensure as far as practicable and subject to any adjustments that
the Commissioner considers fair and equitable in a particular case that the
ratio between:
(i) an insurer's premium income, or estimated premium income, from
policies of employee entitlements protection insurance; and
(ii) the insurer's contributions to the bad risk cross-subsidisation
scheme;
is approximately the same for each approved insurer.
An approved insurer that incurs costs in relation to bad risks is
entitled to be indemnified against those costs under the bad risk
cross-subsidisation scheme to the extent fixed under the scheme.
(1) An employee is entitled to make a claim under a policy of employee
entitlements protection insurance if:
(a) the employer is insolvent; and
(b) an amount covered by the policy has fallen due for payment by the
employer; and
(c) the employer has failed to pay the unpaid amount in full within 14
days after receiving a written claim for payment made by or on behalf of the
employee.
(2) If:
(a) an employer is insolvent; and
(b) written notice of the insolvency is given to an employee by:
(i) the employer; or
(ii) a trustee in bankruptcy, liquidator or other person authorised to
administer the employer's affairs; or
(iii) an insurer under a policy of wage protection insurance;
and
(c) the notice contains information required under the
regulations;
the employee's right (if any) to make a claim under the policy of employee
entitlements protection insurance is extinguished if the claim is not brought
within 6 months after the date the written notice was given.
(1) A claim by an employee under a policy of employee entitlements
protection insurance must be made in writing.
(2) The claim must set out:
(a) the name and address of the claimant; and
(b) the name of the insolvent employer; and
(c) the dates when the claimant's employment with the insolvent employer
started and ended; and
(d) the amount claimed by the claimant under the policy and the basis on
which it is claimed.
(3) The claimant must at the request of the insurer provide any further
information or materials that the insurer may reasonably require to determine
the claim.
A claim is to be made against:
(a) the insurer under the employer's policy of employee entitlements
protection insurance; or
(b) if the employer is an exempt employer or did not hold a policy of wage
protection insurance for the benefit of the employer's workforce—the
nominal insurer.
(4) An insurer must, as expetiously as possible but in any case within 1
month after receiving a claim under a policy of employee entitlements protection
insurance, respond to the claim by giving written notice to the claimant
stating:
(a) whether the insurer rejects or accepts the claim; and
(b) if the insurer accepts the claim in part, stating the amount to which
the insurer believes the claimant to be entitled under the policy.
(5) If, within 14 days after receiving the claim, the insurer reasonably
asks the claimant to provide further information or materials to enable the
insurer to determine the claim, the insurer is not required to respond to the
claim until 14 days after the information or materials are provided.
If a claim under a policy of employee entitlements protection insurance
is disputed, either the insurer or the claimant may refer the dispute for
conciliation in accordance with the relevant conciliation procedures.
(1) If:
(a) an insurer does not respond to a claim as required under this Act;
or
(b) a disputed claim is not resolved in conciliation proceedings;
the claimant may bring an action against the insurer to recover the amount
of the claim in a court with jurisdiction to determine claims in contract up to
the amount of the claim.
(2) In an action brought under subsection (1), an employee protected by a
policy of employee entitlements protection insurance is to be regarded as having
the same rights to claim under the policy as if the employee were a party to the
insurance contract.
If an insurer makes any payment on a claim under a policy of employee
entitlements protection insurance, the insurer is subrogated to the rights of
the claimant against the claimant's employer.
Subject to any directions of the Treasurer, the Commissioner has the
general administration of this Act.
For the purpose of undertaking the general administration of this Act,
the Commissioner has power to do all things that are necessary or convenient to
be done in connection with the administration of the Act and, without limiting
the generality of that power, has power:
(a) to promote the development of facilities for handling inquiries in
relation to employee entitlements protection insurance; and
(b) to monitor complaints in relation to employee entitlements protection
insurance; and
(c) to liaise generally with other persons or bodies having a
responsibility to deal with inquiries, complaints and disputes concerning the
protection of employees; and
(d) to review information and returns given by insurers under this Act;
and
(e) to monitor legal judgments, industry trends and the development of
community expectations that are, or are likely to be, of relevance to the
efficient operation of this Act; and
(f) to promote the education of employers, employees and the insurance
industry as to the objectives and requirements of this Act.
(1) The Commissioner may, for a purpose connected with the administration
or enforcement of this Act, by notice in writing, require an employer or
insurer, within 30 days of receipt of the notice, or such longer period as is
specified in the notice:
(a) to give the Commissioner written answers to questions stated in the
notice; or
(b) to give the Commissioner copies of documents specified in the
notice.
(2) The answers to questions must, if the notice so requires, be verified
by statutory declaration.
(3) A person to whom a notice is given under subsection (1) must not fail,
without reasonable excuse, to comply with the requirements of the
notice.
Penalty: 150 penalty units.
(4) It is a reasonable excuse for a person to refuse or fail to comply
with the requirements of a notice under subsection (1) if to do so would tend to
incriminate the person.
(1) The object of this section is to create duties of non-disclosure for
the purposes of section 70 of the Crimes Act 1914.
(2) Subject to subsections (3), (4) and (6), a person who is or has
been:
(a) the Commissioner; or
(b) a member of the staff assisting the Commissioner;
must not, either directly or indirectly, communicate to any person any
information concerning the affairs of any other person if the information has
been acquired by him or her:
(c) in the exercise or purported exercise of powers under or for the
purposes of this Act; or
(d) in the performance or purported performance of duties under or for the
purposes of this Act.
(3) Subsection (2) does not apply to a person who communicates the
information in the performance of a duty in connection with this Act.
(4) Subsection (2) does not prevent the communication of information or
the production of a document by the Commissioner or by a member of the staff
assisting the Commissioner authorised by the Commissioner:
(a) to the Minister; or
(b) to a court for the purposes of this Act; or
(c) to a person to whom, in the Minister's opinion, it is in the public
interest that the information be communicated or the document produced.
(5) A person who is or has been:
(a) the Commissioner; or
(b) a member of the staff assisting the Commissioner;
is not required:
(c) to communicate to a court any information; or
(d) to produce in court any document;
acquired by him or her, in the exercise or the purported exercise of
powers, or the performance or purported performance of duties, for the purposes
of this Act, except when it is necessary to do so for the purposes of this
Act.
(6) Subsection (2) does not prevent the communication of information or
the production of a document by the Commissioner, or by a member of the staff
assisting the Commissioner authorised by the Commissioner to:
(a) an Agency Head (within the meaning of the Public Service Act
1997); or
(b) an APS employee in the Agency who is approved, in writing, by the
Agency Head;
for the purpose of advising the Minister administering that Agency in
connection with a submission:
(c) made, or to be made, by the Minister administering that Agency to the
Minister administering this Act; and
(d) relating to the administration of this Act.
(7) If information is communicated under subsection (6) to an Agency Head
(within the meaning of the Public Service Act 1997) or an APS employee,
the APS Head or the APS employee must not, either directly or indirectly, except
for the purpose mentioned in subsection (6), divulge or communicate that
information to any person.
The Commissioner may by writing signed by the Commissioner delegate to a
person:
(a) who is a member of the staff appointed to assist the Commissioner in
the performance of the Commissioner's functions; and
(b) who is an SES employee or acting SES employee;
any of the Commissioner's powers under this Act or the
regulations.
(1) The Commissioner must, within 3 months after the end of each financial
year, give to the Treasurer a report on the working of this Act during that year
for presentation to the Parliament.
(2) The report must include copies of audited accounts relating
to—
(a) the Commissioner's income and expenditure as nominal defendant for the
relevant year; and
(b) contributions received from, and payments made to, approved insurers
under the bad risk cross subsidisation scheme for the relevant year.
(1) An approved insurer must provide the Commissioner with periodic
returns as required under the regulations.
(2) The returns must set out:
(a) the gross premium income received by the insurer for policies of
employee entitlements protection insurance received by the insurer in the period
to which the return relates; and
(b) the number of policies of employee entitlements protection insurance
issued by the insurer in the period to which the return relates; and
(c) other information required under the regulations.
(3) An approved insurer must not:
(a) fail, without reasonable excuse, to provide a return as required under
this section; or
(b) include in the return information that is false or misleading in a
material particular.
Penalty: 150 penalty units.
A person is guilty of an offence if:
(a) the person makes a claim against an approved insurer or the nominal
insurer under this Act; and
(b) the claim contains information that is false or misleading in a
material particular.
Penalty: 30 penalty units.
Chapter 2 of the Criminal Code applies to all offences against
this Act.
The Governor-General may make regulations, not inconsistent with this
Act, prescribing matters:
(a) required or permitted by this Act to be prescribed; or
(b) necessary or convenient to be prescribed for carrying out or giving
effect to this Act.
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