CORPORATIONS ACT 2001

CHAPTER 5 - EXTERNAL ADMINISTRATION  

PART 5.8A - EMPLOYEE ENTITLEMENTS  

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

Entering into relevant agreement or transaction

596AC(1)  
A person contravenes this subsection if:


(a) the person enters into a relevant agreement or a transaction (within the meaning of subsection 596AB(3) ); and


(b) the person knows, or a reasonable person in the position of the person would know, that the relevant agreement or the transaction is likely to:


(i) avoid or prevent the recovery of the entitlements of employees of a company; or

(ii) significantly reduce the amount of the entitlements of employees of a company that can be recovered.

Note: This subsection is a civil penalty provision (see section 1317E ).

596AC(2)  
A person who is involved in a contravention of subsection (1) contravenes this subsection.

Note 1: Section 79 defines involved .

Note 2: This subsection is a civil penalty provision (see section 1317E ).

Causing company to enter into relevant agreement or transaction

596AC(3)  
A person contravenes this subsection if:


(a) the person is an officer of a company; and


(b) the person causes the company to enter into a relevant agreement or a transaction (within the meaning of subsection 596AB(3) ); and


(c) the person knows, or a reasonable person in the position of the person would know, that the relevant agreement or the transaction is likely to:


(i) avoid or prevent the recovery of the entitlements of employees of the company; or

(ii) significantly reduce the amount of the entitlements of employees of the company that can be recovered.

Note: This subsection is a civil penalty provision (see section 1317E ).

596AC(4)  
A person who is involved in a contravention of subsection (3) contravenes this subsection.

Note 1: Section 79 defines involved .

Note 2: This subsection is a civil penalty provision (see section 1317E ).

Application of contravention provisions

596AC(5)  
Subsections (1) and (2) apply even if the company is not a party to the relevant agreement or the transaction.

596AC(6)  
Subsections (1), (2), (3) and (4) apply even if:


(a) the relevant agreement or the transaction is approved by a court; or


(b) the relevant agreement or the transaction has not had the effect or effects mentioned in paragraph (1)(b) or (3)(c), as the case may be; or


(c) despite the relevant agreement or the transaction, the entitlements of the employees of the company are recovered.

596AC(7)  
However, subsections (1), (2), (3) and (4) do not apply if:


(a) the relevant agreement or the transaction is, or is entered into under:


(i) a compromise or arrangement between the company and its creditors or a class of its creditors, or its members or a class of its members, that is approved by a Court under section 411 ; or

(ii) a deed of company arrangement executed by the company; or


(b) a liquidator or provisional liquidator of the company causes the relevant agreement or the transaction to be entered into in the course of winding up the company.

596AC(8)  
A person who wishes to rely on subsection (7) in a proceeding for, or relating to, a contravention of subsection (1), (2), (3) or (4) bears an evidential burden in relation to that matter. Proceedings may be begun only after liquidator appointed

596AC(9)  
Proceedings under section 1317E for a declaration of a contravention of this section may only be begun after a liquidator has been appointed to the company. Linked debts

596AC(10)  
If a person contravenes this section by incurring a debt (within the meaning of section 588G ), the incurring of the debt and the contravention are linked for the purposes of this Act. Definitions

596AC(11)  
In this section:

evidential burden
, in relation to a matter, means the burden of adducing or pointing to evidence that suggests a reasonable possibility that the matter exists or does not exist.


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