Consultations Paper on “Reforms to address corporate misuse of the Fair Entitlements Guarantee Scheme"
The submission to the Department of Employment in response to the consultation paper dated May 2017 on “Reforms to address corporate misuse of the Fair Entitlements Guarantee scheme” (Consultation Paper) was prepared by the Insolvency and Reconstruction Committee of the Business Law Section.
The Committee generally supports measures to address potential abuse of the Fair Entitlements Guarantee Scheme (FEG scheme). However, the Committee suggests it would be helpful to better articulate the sharp corporate practices that the draft amendments seek to address.
The broad example listed at sub-paragraph 3.2(i) on page 4 of the Consultation Paper is vague. There are already legal solutions available to address the practices set out at sub-paragraphs (ii), (iii) and (iv) on page 5 of the Consultation Paper.
As explained below, the Committee supports a number of the proposed measures. However, the Committee asks that the legislative drafters be clear in the behaviour that is sought to be addressed and consider if and why existing laws and measures are inadequate.
You can read the full submission below.