Document ID: chunk:federal_register_of_legislation:C2019A00044:clause:1_588za:p1
Version: federal_register_of_legislation:C2019A00044
Segment Type: clause
Provision Reference: sch 1 cl 588ZA (pt 1/2)
Character Range: 20752–23475

588ZA  Employee entitlements contribution orders

Making of employee entitlements contribution order
 (1) The Court may make an order under subsection (2) (an employee entitlements contribution order) in relation to an entity (the contributing entity) if the Court is satisfied that:
 (a) a company (the insolvent company) is being wound up; and
 (b) an amount (the unpaid entitlements amount) of the entitlements of one or more employees (within the meaning of Part 5.8A) of the insolvent company that are protected under Part 5.8A has not been paid; and
 (c) the contributing entity is a member of the same contribution order group (see subsection (6)) as the insolvent company; and
 (d) the contributing entity has benefited, directly or indirectly, from work done by those employees; and
 (e) that benefit exceeds the benefit that would be reasonable in the circumstances if the insolvent company and the contributing entity were dealing at arm's length; and
 (f) it is just and equitable to make the order.
Note 1: For the people who may apply to the Court for an employee entitlements contribution order, see section 588ZB.
Note 2: A reference in Part 5.8A to an employee of a company is a reference to a current or former employee, and includes a reference to another person to whom an entitlement of an employee is owed (see section 596AA).
 (2) For the purposes of subsection (1), the Court may order the contributing entity to pay to the liquidator of the insolvent company an amount that:
 (a) reflects the value of the excess referred to in paragraph (1)(e); and
 (b) does not, together with any other payments required to be made in respect of the unpaid entitlements amount by the order, exceed the unpaid entitlements amount.
 (3) The payment of an amount in accordance with an employee entitlements contribution order is not to be taken to be an advance of money for the purposes of section 560.
 (4) In determining whether it is just and equitable to make an employee entitlements contribution order, the Court may have regard to the following matters:
 (a) the size of the excess referred to in paragraph (1)(e);
 (b) the nature of the relationship between the contributing entity and the insolvent company;
 (c) any efforts made by the contributing entity, or officers of the contributing entity, and officers of the insolvent company to pay or to provide for the payment of the unpaid entitlements amount;
 (d) if the contributing entity is solvent—whether the order is likely to result in the contributing entity becoming insolvent;
 (e) the extent (if any) to which the order is likely to result in the contributing entity becoming unable to pay the entitlements of its employees or make distributions