Page 5731 - Week 15 - Thursday, 10 December 2009
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distinction, the default insurance fund is able to work cooperatively with employers who have neglected to obtain a compulsory insurance policy but accept responsibility for payment of medical costs, weekly compensation and rehabilitation to the injured worker. This flexibility ensures the timely payment of compensation to injured workers.
Where the employer is unable to meet the cost of the claim immediately, the default insurer establishes a payment plan for the employer to ensure their worker is not disadvantaged and to ensure every measure is taken to assist employers to take responsibility for their actions. The broadening of the civil liability proposal to apply to the default insurance fund would undermine the ability of the fund to conduct its business in a flexible and functional way in keeping with the spirit of the legislation and in order to protect the interests of injured workers.
In relation to the fourth amendment, the intent of this provision as drafted is to establish a personal officer liability in the event that the corporation is unable to pay the debt or is in the process of being wound up. This intent reflects the status of an incorporated entity as a natural person for liability purposes. There are limits on how far the corporate veil can and should be pierced. The amendment strikes at the core of the protections offered by corporations law. The liability should only attach to an officer in the event that liability has been established against the corporation and as a matter of fact the corporation has been unable to discharge the penalties arising from its non-compliant conduct.
The amendment proposed by the Greens risks serious manipulation of corporate structures with a view to avoiding the penalties altogether and clearly such an outcome could undermine the compliance objectives inherent in the Workers Compensation Act.
In relation to one of the final amendments, No 5, the effect of the proposed amendment is to confer discretion on the chief executive without expressing any clear or certain boundaries on the exercise of that discretion if indeed a culpable officer would have no mechanism for understanding or assessing the basis for the chief executive’s decision to recover the amount or part thereof. To ascertain this understanding, the culpable officer would be forced to commence legal proceedings to understand their right of appeal. Again I refer to scrutiny report No 16 issued on Monday, 7 December.
In regard to amendment 6, this proposal fundamentally misunderstands the nature of the penalty as a debt that arises as a result of non-compliant conduct by the corporation. It is not appropriate to remove the corporation’s responsibility to meet that debt which is a consequence of their actions by simultaneously pursuing a culpable officer and reducing the ultimate penalty. A culpable executive officer should only be pursued for satisfaction of the debt where the corporation has demonstrated inability to pay and this accords with the fact that it is the corporation’s conduct that has given rise to the offence. I might leave it there.
MRS DUNNE (Ginninderra) (4.42): These amendments significantly extend the reach of the bill and the penalties that relate to the civil liability of executive officers of corporations. They expose executive officers to considerably more than what are
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