Document ID: chunk:federal_register_of_legislation:C2004A00669:clause:1_596ac
Version: federal_register_of_legislation:C2004A00669
Segment Type: clause
Provision Reference: sch 1 cl 596AC
Character Range: 5301–6899

596AC  Person who contravenes section 596AB liable to compensate for loss

 (1) 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.

 (2) 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.

 (3) 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.

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