Thinking outside the square - alternative approaches to the protection of employee entitlements

It is time to re-evaluate the measures by which directors and officers of companies are deterred from behaviour which threatens employee entitlements upon insolvency. This debate has lost the momentum it had at the end of the last century, arguably because of the introduction of taxpayer-funded safety net schemes. However, the misdeeds of company controllers have not decreased, and both liquidators and victims are disillusioned with the relative lack of action from the regulator, the Australian Securities and Investments Commission (ASIC). This article outlines ASIC s present approach to prosecutions of breaches of the Corporations Act 2001 (Cth) against controllers of insolvent companies, and considers what else might be done to assist in the protection of employee entitlements.