As the Federal Government nears the half way point of its current term, previous election commitments regarding the Protecting Workers’ Entitlement Package, has seen the release of two draft Bills for comment on 20 December 2011.
The Corporations Amendment (Phoenixing and Other Measures) Bill 2012 proposes to give the Australian Securities Investment Commission (ASIC) the administrative power to order that a company be wound up, if it considers it has been ‘abandoned’. This in turn will then trigger the ability of employees to claim entitlements under the Government’s General Employee Entitlements and Redundancy Scheme (GEERS).
This measure is certainly beneficial to “orphaned” employees of stricken companies will no longer be kept in limbo, waiting for a director or creditor to spend the money to have the company wound up. Before making such an order, ASIC will need to obtain a consent from a liquidator. One issue may be, as abandoned companies by their very nature are usually without assets, who will fund the cost of these ‘ASIC liquidations’?
Consultation on this Bill closed on 24 January 2012.