Federal Register of Legislation - Australian Government

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A Bill for an Act to amend the Corporations Act 2001 and the Workplace Relations Act 1996, and for related purposes
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Introduced HR 11 Mar 2002

Corporate Responsibility and Employment Security Bill 2002
First Reading

2002

The Parliament of the

Commonwealth of Australia

HOUSE OF REPRESENTATIVES

Presented and read a first time

Corporate Responsibility and Employment Security Bill 2002

No. , 2002

(Mr McClelland)

A Bill for an Act to amend the Corporations Act 2001 and the Workplace Relations Act 1996, and for related purposes

Contents

1 Short title       1

2 Commencement and retrospective application       1

Schedule 1--Amendments to the Corporations Act 2001       3

Division 6A - Liability of a related body corporate for the debts or liabilities of a company       4

Schedule 2--Amendments to the Workplace Relations Act 1996       6

170JI        Extended operation of reinstatement order to related body corporate 6

178A Liability of related body corporate for legal entitlements payable to employees of employer       7

A Bill for an Act to amend the Corporations Act 2001 and the Workplace Relations Act 1996, and for related purposes

The Parliament of Australia enacts:

1 Short title
        This Act may be cited as the Corporate Responsibility and Employment Security Act 2002.

2 Commencement and retrospective application
       (1) Subject to subsection (2), this Act is taken to have commenced on 12 September 2001 at 9.00 am by legal time in the Australian Capital Territory and applies in respect to companies that are in the course of being wound up or are wound up in the period between the commencement of this Act and the time when this Act received Royal Assent and to the period subsequent to Royal Assent.

       (2) The amendments made by item 3 of Schedule 2 come into effect on a day to be fixed by proclamation.

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        Each Act that is specified in a Schedule to this Act is amended or repealed as set out in the applicable items in the Schedule concerned, and any other item in a Schedule to this Act has effect according to its terms.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--Amendments to the Corporations Act 2001
1 After Division 6 of Part 5.7B

Insert:

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

588YA Liability of a related body corporate for the debts or liabilities of a company

       (1) When a company is being wound up in insolvency, the liquidator, a creditor of the company, a nominee of a creditor of the company or the ASIC 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) whether the company provided services for or on behalf of the related body corporate; and

       (b) whether the company occupied premises which are owned by the related body corporate; and

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

       (d) the conduct of the related body corporate

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towards the creditors of the company generally and to the creditor to which the debt or liability relates; and

       (e) 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 or an officer or officers of the related body corporate; and

       (f) any other relevant matters as the Court considers just and appropriate.

       (3) Where the Court is satisfied that the matters set out in 2(a) to (f) exist or that the circumstances that gave rise to the winding up of the company are substantially attributable to the actions of the related body corporate or an officer or officers of the related body corporate, the related body corporate shall bear the onus of establishing why an order under this section should not be made.

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

       (5) 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 1317J

Insert after subsection 1317J(2):

(2A)        A creditor of the corporation, or a nominee of a creditor of the corporation, may apply for a compensation order.

Schedule 2--Amendments to the Workplace Relations Act 1996
2 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.

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 Act 2001.

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), 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


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       (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: $1000.

       (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 Act 2001.

3. After section 179D

179E Recovery of wages by independent contractor etc from principal contractor
       (1) This section applies where:

       (a) a person (the independent contractor) has entered into a contract for the performance of work in connection with a constitutional corporation (the principal contractor) and;

       (b) the independent contractor and/or employees of the independent contractor (the relevant employees) are engaged or have been engaged in carrying out the work; and

       (c) amounts are payable to the independent contractor and/or employees of the independent contractor as payment for that work (the relevant amounts).

       (2) The principal contractor is liable for payment of relevant amounts to relevant employees where

       (a) the person or entity which was liable to pay the independent contractor is being wound up, is in receivership or is bankrupt, or

       (b) the independent contractor is being wound up, is in receivership or is bankrupt,

        unless the independent contractor has, or the relevant employees have, provided the principal contractor with a written statement under this section.

       (3) The written statement is a statement by the independent contractor or the relevant employees that all payments for work done under the contract have been made. The regulations may make provision for or with respect to the form of the written statement.

       (4) If the principal contractor

       (a) pays the relevant amounts to discharge its liability under subsection (2), and

       (b) has previously paid money which represents the relevant amounts

        the principal contractor may recover the relevant amounts, as an unsecured creditor, from the relevant person or entity being wound up, in receivership or bankrupt.

       (5) If the principal contractor pays the relevant amounts to discharge its liability under subsection (2), the independent contractor and/or relevant employees may not seek payment of those amounts from another person.

       (6) The principal contractor and the independent contractor must keep a copy of any written statement provided under subsection (2) for at least 6 years after it has been given.

       (7) An independent contractor or a relevant employee who gives a principal contractor a written statement knowing it to be false is guilty of an offence.

        Penalty: $1000.

       (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 principal contractor under this section.