House of Representatives

Explanatory Memorandum

(Circulated with authority of the Treasurer, the Hon Peter Costello, MP)

Outline

This Bill proposes amendments to the Corporations Law that will:

•

introduce a new offence to penalise persons who deliberately enter into agreements or transactions for the purpose of avoiding payment of employee entitlements;

•

allow a court to order people in breach of the new offence provision to pay compensation to employees who have suffered loss or damage because of the agreements or transactions; and

•

deem that a company incurs a debt for the purposes of the insolvent trading provisions when it enters into an uncommercial transaction, thereby extending the current duty on directors not to engage in insolvent trading.

Financial impact

There is no expected financial impact on the Commonwealth as a result of the Bill.