Federal Register of Legislation - Australian Government

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A Bill for an Act to amend the Workplace Relations Act 1996 and the Corporations Law, in order to help protect the entitlements of employees
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Introduced HR 26 Feb 2001

Employment Security Bill 2001
First Reading

1998-1999-2000-2001

The Parliament of the

Commonwealth of Australia

HOUSE OF REPRESENTATIVES

Presented and read a first time

Employment Security Bill 2001

No. , 2001

(Mr Bevis)

A Bill for an Act to amend the Workplace Relations Act 1996 and the Corporations Law, in order to help protect the entitlements of employees

ISBN: 0642 46619X

Contents

Division 6A - Liability of a company for the debts or liabilities of a related company

A Bill for an Act to amend the Workplace Relations Act 1996 and the Corporations Law, in order to help protect the entitlements of employees

The Parliament of Australia enacts:

1 Short title This Act may be cited as the Employment Security Act 2001.

2 Commencement This Act commences on the day on which it receives the Royal Assent.

3 Schedule Each Act that is specified in a Schedule to this Act is amended or repealed as set out in the applicable items in the Schedule concerned, and any other item in a Schedule to this Act has effect according to its terms.

Schedule 1--Workplace Relations Act 1996

1 After section 170JH

Insert:

170JI Extended operation of reinstatement order to related body corporate. (1) Where:

(a) the Commission has determined that an employer that is a company should reinstate an employee pursuant to subsection 170CH(3); or

(b) the Court has determined that an employer that is a company should reinstate an employee pursuant to subsection 170CR(1) or section 298U;

the Commission or the Court respectively may, if it is satisfied that it is just, order that a related body corporate shall be deemed to be the employer for the purpose of the reinstatement order.

(2) In deciding whether it is just to make an order under subsection (1), the matters to which the Commission and the Court respectively shall have regard include:

(a) the extent to which reinstatement of the employee by the employer is impractical because the employer is in receivership or is in the course of being wound up; and

(b) the extent to which the related body corporate took part in the management of the employer; and

(c) the extent to which the circumstances that gave rise to the receivership or to the winding up of the employer are attributable to the actions of the related body corporate; and

(d) any other relevant matters.

(3) The Commission and the Court have power to make such other orders as each respectively thinks fit regulating the contract of employment between the employee and the related body corporate, and otherwise dealing with accrued entitlements, continuity of employment and all other matters necessary to give practical effect to the reinstatement order.

(4) In this section related body corporate has the same meaning as that term has in section 9 of the Corporations Law.

2 After Section 178

Insert:

178A Liability of related body corporate for legal entitlements payable to employees of employer (1) This section applies where:

(a) a company (the related body corporate) has entered into a contract for the carrying out of work for or on its behalf by a related company (the employer),

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including a contract or arrangement to hire labour from the employer; and

(b) the employer has contracted to undertake work for or on behalf of the related body corporate, including the provision of labour services to the related body corporate; and

(c) employees of the employer are engaged in carrying out the work (the relevant employees); and

(d) the work is carried out in connection with a business undertaking of the related body corporate; and

(e) the relevant employees are, or at the time of the non payment were, subject to an award, an order of the Commission, a certified agreement or an Australian Workplace Agreement.

(2) The related body corporate is liable for the payment of any legal entitlements of the relevant employees that have not been paid for work done by the employees in connection with the contract unless the related body corporate has a written statement given by the employer under this section.

(3) The written statement for the purpose of this section is a statement by the employer that all legal entitlements payable to the relevant employees for work under the contract done during the period specified in the statement that have been paid. The regulations may make provision for or with respect to the form of the written statement.

(4) The related body corporate and the employer must keep a copy of any written statement under this section for at least 6 years after it was given.

(5) The related body corporate may withhold any payment due to the employer under the contract until the employer gives a written statement under this section for any period up to the date of the statement. Any penalty for late payment under the contract does not apply to any payment withheld under this subsection.

(6) The written statement is not effective to relieve the related body corporate of liability under this section if a reasonable person in the position of the related body corporate would, when given the statement, have reason to believe it was false.

(7) An employer who gives the related body corporate a written statement knowing it to be false is guilty of an offence.

Maximum penalty: 10,000 penalty units.

(8) The provisions of this Act relating to the recovery of amounts payable under relevant legislation, an award, an order of the Commission, a certified agreement or an Australian Workplace Agreement apply to the recovery of legal entitlements payable by a related body corporate under this section.

(9) To avoid doubt, this section extends to a contract if the employer is in receivership or in the course of being wound up unless payments made under the contract are made to the receiver or liquidator specifically in respect to the legal entitlements of the employees.

(10) In this section:

legal entitlements means remuneration and all other amounts payable to relevant employees under relevant legislation, an award, an order of the Commission, a certified agreement or an Australian Workplace Agreement in connection with work done by the employees, and includes but is not limited to accrued leave entitlements, sick leave, superannuation, redundancy and severance pay entitlements.

related body corporate has the same meaning as that term has in section 9 of the Corporations Law.

Schedule 2--Corporations Law 1 After Division 6 of Part 5.7B

Insert:

Division 6A - Liability of a company for the debts or liabilities of a related company

(1) When a company is being wound up in insolvency, the liquidator, a creditor of the company or the ASC may apply to the Court for an order that a company that is or has been a related body corporate pay to the liquidator the whole or part of the amount of a debt of the insolvent company. The Court may make such an order if it is satisfied that it is just to do so.

(2) In deciding whether it is just to make an order under subsection (1), the matters to which the Court shall have regard include:

(a) the extent to which the related company took part in the management of the company; and

(b) the conduct of the related company towards the creditors of the company generally and to the creditor to which the debt or liability relates; and

(c) the extent to which the circumstances that gave rise to the winding up of the company are attributable to the actions of the related body corporate; and

(d) any other relevant matters.

(3) An order under this section may be subject to conditions.

(4) An order shall not be made under this section if the only ground for making the order is that creditors of the company have relied on the fact that another company is or has been a related body corporate of the company.

2 Section 1317HD

Repeal the section, substitute:

1317HD Recovery of profits, and compensation for loss, resulting from contravention (1) Where a person contravenes a civil penalty provision in relation to a corporation, the corporation, a creditor or the ASC may recover from the person, as a debt due to the corporation:

(a) if that or another person has made a profit because of the act or omission constituting the contravention - an amount equal to the amount of that profit; and

(b) if the corporation has suffered loss or damage as a result of that act or omission - an amount equal to the amount of that loss or damage;

whether or not:

(c) the first-mentioned person has been convicted of an offence in relation to the contravention; or

(d) a civil penalty order has been made against the first-mentioned person in relation to the contravention.

(2) Proceedings under this section may only be begun within 6 years after the contravention.