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CORPORATIONS ACT 2001

CHAPTER 5 - EXTERNAL ADMINISTRATION  

PART 5.8A - EMPLOYEE ENTITLEMENTS  

SECTION 596AC  PERSON WHO CONTRAVENES SECTION 596AB LIABLE TO COMPENSATE FOR LOSS  

596AC(1)  [Circumstances where liable to pay compensation]  


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.

596AC(2)  [Recovery by liquidator]  


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.

596AC(3)  [Recovery by employee]  


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.

596AC(4)  [Time limit]  


Proceedings under this section may only be begun within 6 years after the beginning of the winding up.

 



This information is provided by CCH Australia Limited. View the disclaimer and notice of copyright.
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